IDEAS home Printed from https://ideas.repec.org/a/ucp/ecdecc/v58y2010i3p385-413.html
   My bibliography  Save this article

Income and Consumption Inequality in Urban China: 1992-2003

Author

Listed:
  • Hongbin Cai
  • Yuyu Chen
  • Li-An Zhou

Abstract

Using the nationally representative Urban Household Income and Expenditure Survey (UHIES) conducted by the National Bureau of Statistics (NBS) of China, we document a steadily rising trend in income and consumption inequality during the period from 1992 to 2003 in urban China. Despite the rising urban inequality over time, the social welfare of urban residents unambiguously improved because every income group saw their income and consumption increase over this period (higher income groups experienced faster increases). Moreover, consumption inequality follows income inequality very closely. Labor income inequality accounts for about two-thirds of total income inequality quite consistently over time. We find that only about one-third of urban inequality can be attributed to observable individual choices and characteristics, of which education has increasing explanatory power, while regional differences become less important over time. We also find that restructuring of the SOE sector, urbanization, and globalization are important contributing factors to rising overall urban inequality and the within-group inequality not accounted for by observable individual choices and characteristics. (c) 2010 by The University of Chicago. All rights reserved.

Suggested Citation

  • Hongbin Cai & Yuyu Chen & Li-An Zhou, 2010. "Income and Consumption Inequality in Urban China: 1992-2003," Economic Development and Cultural Change, University of Chicago Press, vol. 58(3), pages 385-413, April.
  • Handle: RePEc:ucp:ecdecc:v:58:y:2010:i:3:p:385-413
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/650423
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

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

    References listed on IDEAS

    as
    1. Lin, Justin Y & Wang, Gewei & Zhao, Yaohui, 2004. "Regional Inequality and Labor Transfers in China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 587-603, April.
    2. Johnson, David & Shipp, Stephanie, 1997. "Trends in Inequality Using Consumption-Expenditures: The U.S. from 1960 to 1993," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(2), pages 133-152, June.
    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. James Alm & Yongzheng Liu, 2014. "China's Tax-for-Fee Reform and Village Inequality," Oxford Development Studies, Taylor & Francis Journals, vol. 42(1), pages 38-64, March.
    2. Johansson, Anders C. & Wang, Xun, 2012. "Financial Sector Policies, Poverty and Inequality," Working Paper Series 2012-24, Stockholm School of Economics, China Economic Research Center.
    3. repec:eee:jcecon:v:45:y:2017:i:2:p:304-324 is not listed on IDEAS
    4. Meng, Xin & Shen, Kailing & Xue, Sen, 2013. "Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 227-244.
    5. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    6. 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.
    7. Hung-Hao Chang, 2012. "Consumption inequality between farm and nonfarm households in Taiwan: a decomposition analysis of differences in distribution," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 487-498, September.
    8. John Whalley & Chunbing Xing, 2010. "The Regional Distribution of Skill Premia in Urban China," NBER Working Papers 16575, National Bureau of Economic Research, Inc.
    9. Shi, Xiaojun & Wang, Hung-Jen & Xing, Chunbing, 2015. "The role of life insurance in an emerging economy: Human capital protection, assets allocation and social interaction," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 19-33.
    10. Quheng Deng & Bjorn Gustafsson, 2011. "A New Episode of Increased Urban Income Inequality in China," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201116, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    11. Chamon, Marcos & de Carvalho Filho, Irineu, 2014. "Consumption based estimates of urban Chinese growth," China Economic Review, Elsevier, vol. 29(C), pages 126-137.
    12. Johansson, Anders C. & Wang, Xun, 2014. "Financial sector policies and income inequality," China Economic Review, Elsevier, vol. 31(C), pages 367-378.
    13. Bjorn Gustafsson & Sai Ding, 2011. "Unemployment and the Rising Number of Non-Workers in Urban China: Causes and Distributional Consequences," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201117, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    14. Xing, Chunbing & Li, Shi, 2012. "Residual wage inequality in urban China, 1995–2007," China Economic Review, Elsevier, vol. 23(2), pages 205-222.

    More about this item

    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:ucp:ecdecc:v:58:y:2010:i:3:p:385-413. 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: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/EDCC/ .

    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.