IDEAS home Printed from https://ideas.repec.org/a/eee/jcecon/v40y2012i2p228-239.html
   My bibliography  Save this article

Capital income and income inequality: Evidence from urban China

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S014759671200025X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Guanghua Wan & Zhangyue Zhou, 2005. "Income Inequality in Rural China: Regression-based Decomposition Using Household Data," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 107-120, February.
    2. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
    3. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    4. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
    5. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    6. Chi, Wei & Li, Bo & Yu, Qiumei, 2011. "Decomposition of the increase in earnings inequality in urban China: A distributional approach," China Economic Review, Elsevier, vol. 22(3), pages 299-312, September.
    7. Kattuman, Paul & Redmond, Gerry, 2001. "Income Inequality in Early Transition: The Case of Hungary 1987-1996," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 40-65, March.
    8. Gustafsson, Bjorn & Shi, Li, 2001. "The Anatomy of Rising Earnings Inequality in Urban China," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 118-135, March.
    9. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    10. Knight, John B & Song, Lina, 1991. "The Determinants of Urban Income Inequality in China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(2), pages 123-154, May.
    11. John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December.
    12. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    13. Guriev, Sergei & Rachinsky, Andrei, 2006. "The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe," WIDER Working Paper Series 120, World Institute for Development Economic Research (UNU-WIDER).
    14. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    15. Björn Gustafsson & Li Shi, 2001. "The effects of transition on the distribution of income in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(3), pages 593-617, November.
    16. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    17. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    18. Xin Meng, 2004. "Economic Restructuring and Income Inequality in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 357-379, September.
    19. Fräßdorf, Anna & Grabka, Markus M. & Schwarze, Johannes, 2011. "The Impact of Household Capital Income on Income Inequality - A Factor Decomposition Analysis for the UK, Germany and the USA," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 35-56.
    20. Graham Pyatt & Chau-nan Chen & John Fei, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 451-473.
    21. Jantti, Markus, 1997. "Inequality in Five Countries in the 1980s: The Role of Demographic Shifts, Markets and Government Policies," Economica, London School of Economics and Political Science, vol. 64(255), pages 415-440, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:lsprsc:v:10:y:2017:i:3:d:10.1007_s12076-017-0192-z is not listed on IDEAS
    2. repec:spr:soinre:v:136:y:2018:i:1:d:10.1007_s11205-016-1534-8 is not listed on IDEAS
    3. Thomas Piketty & Li Yang & Gabriel Zucman, 2017. "Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015," NBER Working Papers 23368, National Bureau of Economic Research, Inc.
    4. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2017. "The Great Chinese Inequality Turnaround," IZA Discussion Papers 10635, Institute for the Study of Labor (IZA).
    5. repec:taf:rjapxx:v:22:y:2017:i:2:p:212-226 is not listed on IDEAS
    6. repec:gam:jsoctx:v:8:y:2018:i:3:p:45-:d:153722 is not listed on IDEAS
    7. repec:bla:ecinqu:v:56:y:2018:i:1:p:572-619 is not listed on IDEAS
    8. 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).
    9. 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.
    10. 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.
    11. 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.
    12. Jin, Hailong & Qian, Hang & Wang, Tong & Choi, E. Kwan, 2014. "Income distribution in urban China: An overlooked data inconsistency issue," China Economic Review, Elsevier, vol. 30(C), pages 383-396.
    13. 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.

    More about this item

    Keywords

    Capital income; Income inequality; Regional income gaps; Gini coefficient;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:40:y:2012:i:2:p:228-239. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622864 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.