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Income Inequality, State Ownership, and the Pattern of Economic Growth – A Tale of the Kuznets Curve for China since 1978

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  • Ying Wu
  • Hong Yao

Abstract

The lack of supposed trickle-down benefits for industrialization to reduce income inequality during China’s 30 years of post-reform economic growth appears to constitute an anomaly for the inverted U-shaped Kuznets curve hypothesis. Using an alternative inequality measure that depends on factor share and ownership, we show that in a transition economy with the state weight of capital less than its market counterpart, enhanced state ownership exacerbates inequality. Econometric evidence suggests that although the government attempts to balance the three goals of growth, equality, and state ownership in the short run, stubborn state ownership as well as lopsided growth patterns jeopardize equality in the long run and have therefore delayed the turning point in the inverted U-shaped Kuznets curve for China. Copyright International Atlantic Economic Society 2015

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  • Ying Wu & Hong Yao, 2015. "Income Inequality, State Ownership, and the Pattern of Economic Growth – A Tale of the Kuznets Curve for China since 1978," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 165-180, June.
    • Handle: RePEc:kap:atlecj:v:43:y:2015:i:2:p:165-180
    DOI: 10.1007/s11293-015-9451-9
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    2. Byron Quito & María de la Cruz del Río‐Rama & José Álvarez‐García & Ronny Correa‐Quezada, 2022. "Impact factors and space‐time characteristics of income inequality in a global sample," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1850-1868, December.
    3. Khambai Khamjalas, 2024. "Exploring the Spatial Dynamics of FEW Nexus Policies and Their Impact on Income Inequality Using Spatial Econometric Models: Evidence from Southeast Asian Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 14(2), pages 152-167, March.
    4. Shixiong Cao & Zhexi Liu & Weiming Li & Li Chen, 2024. "How Can Governments Be Motivated to Stably and Ethically Govern a Country? Lessons Learned from China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 17579-17597, December.
    5. Lee, Chien-Chiang & Yuan, Zihao & Ho, Shan-Ju, 2022. "How does export diversification affect income inequality? International evidence," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 410-421.
    6. Charles RARICK & Kasia FIRLEJ, 2016. "Leadership and the Mandate of Heaven: Political Risk in China," Journal of Economics and Political Economy, KSP Journals, vol. 3(2), pages 183-191, June.
    7. Ruijia Wu & Rafael Alvarado & Priscila Méndez & Brayan Tillaguango, 2024. "Impact of Informational and Cultural Globalization, R&D, and Urbanization on Inequality," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1666-1702, March.
    8. Nguyen, Canh Phuc & Nasir, Muhammad Ali, 2021. "An inquiry into the nexus between energy poverty and income inequality in the light of global evidence," Energy Economics, Elsevier, vol. 99(C).
    9. Canh, Nguyen Phuc & Schinckus, Christophe & Thanh, Su Dinh & Hui Ling, Felicia Chong, 2020. "Effects of the internet, mobile, and land phones on income inequality and The Kuznets curve: Cross country analysis," Telecommunications Policy, Elsevier, vol. 44(10).
    10. Le, Thai-Ha & Nguyen, Canh Phuc & Su, Thanh Dinh & Tran-Nam, Binh, 2020. "The Kuznets curve for export diversification and income inequality: Evidence from a global sample," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 21-39.

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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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