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Capital income and income inequality: Evidence from urban China

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  • Chi, Wei

Abstract

Using the urban household survey data collected by the National Bureau of Statistics of China from 1988 to 2009, this study examines the distribution, composition, and changes in capital income and its contribution to income inequality. The data shows that capital income has increased considerably in past 20years in urban China. Although the average value of capital income is still relatively low, the dispersion of capital income is significant, and for high-income earners capital income is substantial. Compared to other forms of income, capital income is distributed the most unequally, and its contribution to total income inequality has been growing. This study also examines capital income in China’s western, central, and eastern regions separately, and finds that capital income is highest and contributes the most to income inequality in the eastern region.

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  • Chi, Wei, 2012. "Capital income and income inequality: Evidence from urban China," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 228-239.
    • Handle: RePEc:eee:jcecon:v:40:y:2012:i:2:p:228-239
    DOI: 10.1016/j.jce.2012.03.004
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    7. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    8. Jiaoli Cai & Li Zhang & Yulin Zhao & Peter C. Coyte, 2018. "Psychological Mechanisms Linking County-Level Income Inequality to Happiness in China," IJERPH, MDPI, vol. 15(12), pages 1-32, November.
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    12. Herzer, Dierk & Nunnenkamp, Peter, 2012. "FDI and health in developed economies: A panel cointegration analysis," Kiel Working Papers 1756, Kiel Institute for the World Economy (IfW Kiel).
    13. Herzer, Dierk & Nunnenkamp, Peter, 2012. "The effect of foreign aid on income inequality: Evidence from panel cointegration," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 245-255.
    14. Meltem Ucal & Alfred Albert Haug & Mehmet Hüseyin Bilgin, 2016. "Income inequality and FDI: evidence with Turkish data," Applied Economics, Taylor & Francis Journals, vol. 48(11), pages 1030-1045, March.
    15. Dierk Herzer, 2016. "Unions and Income Inequality," Economic Development Quarterly, , vol. 30(3), pages 267-274, August.
    16. Tamminen, Saara, 2014. "Varying markups and income inequality in an open economy," Conference papers 332437, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    18. Molero-Simarro, Ricardo, 2017. "Inequality in China revisited. The effect of functional distribution of income on urban top incomes, the urban-rural gap and the Gini index, 1978–2015," China Economic Review, Elsevier, vol. 42(C), pages 101-117.
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    21. Riccardo Leoncini, 2017. "Innovation, inequality and the skill premium," SPRU Working Paper Series 2017-16, SPRU - Science Policy Research Unit, University of Sussex Business School.

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    More about this item

    Keywords

    Capital income; Income inequality; Regional income gaps; Gini coefficient;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • D3 - Microeconomics - - Distribution

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