China's income distribution over time: reasons for rising inequality
We use a new method to estimate Chinaâ€™s income distributions using publicly available interval summary statistics from Chinaâ€™s largest national household survey. We examine rural, urban, and overall income distributions for each year from 1985-2001. By estimating the entire distributions, we can show how the distributions change directly as well as examine trends in traditional welfare indices such as the Gini. We find that inequality has increased substantially in both rural and urban areas. Using an inter-temporal decomposition of aggregate inequality, we determine that increases in inequality within the rural and urban sectors and the growing gap in rural and urban incomes have been equally responsible for the growth in overall inequality over the last two decades. However, the rural-urban income gap has played an increasingly important role in recent years. In contrast, only the growth of inequality within rural and urban areas is responsible for the increase in inequality in the United States, where the overall inequality is close to that of China. We also show that urban consumption inequality (which may be a better indicator of economic well-being than income inequality) rose considerably.
(This abstract was borrowed from another version of this item.)
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: 207 Giannini Hall #3310, Berkeley, CA 94720-3310|
Phone: (510) 642-3345
Fax: (510) 643-8911
Web page: http://areweb.berkeley.edu/library/Main/CUDARE
More information through EDIRC
|Order Information:|| Postal: University of California, Giannini Foundation of Agricultural Economics Library, 248 Giannini Hall #3310, Berkeley CA 94720-3310|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- D. Ormoneit & H. White, 1999. "An efficient algorithm to compute maximum entropy densities," Econometric Reviews, Taylor & Francis Journals, vol. 18(2), pages 127-140.
- Dirk Kreuger & Fabrizio Perri, 2002.
"Does Income Inequality Lead to Consumption Inequality? Evidence and Theory,"
02-15, New York University, Leonard N. Stern School of Business, Department of Economics.
- Krueger, Dirk & Perri, Fabrizio, 2005. "Does income inequality lead to consumption inequality? Evidence and theory," CFS Working Paper Series 2005/15, Center for Financial Studies (CFS).
- Dirk Krueger & Fabrizio Perri, 2002. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory," NBER Working Papers 9202, National Bureau of Economic Research, Inc.
- Dirk Krueger & Fabrizio Perri, 2005. "Does income inequality lead to consumption equality? evidence and theory," Staff Report 363, Federal Reserve Bank of Minneapolis.
- T. Paul Schultz, 2004.
"Human resources in China: the birth quota, returns to schooling, and migration,"
Pacific Economic Review,
Wiley Blackwell, vol. 9(3), pages 245-267, October.
- T. Paul Schultz, 2004. "Human Resources in China: The Birth Quota, Returns to Schooling, and Migration," Yale School of Management Working Papers ysm366, Yale School of Management.
- T. Paul Schultz, 2003. "Human Resources in China: The Birth Quota, Returns to Schooling, and Migration," Working Papers 855, Economic Growth Center, Yale University.
- Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
- Ravallion, Martin & Chen, Shaohua, 1999. " When Economic Reform Is Faster Than Statistical Reform: Measuring and Explaining Income Inequality in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(1), pages 33-56, February.
- Dennis Tao Yang, 1999. "Urban-Biased Policies and Rising Income Inequality in China," American Economic Review, American Economic Association, vol. 89(2), pages 306-310, May.
- Simon Kuznets, 1950.
"Shares of Upper Income Groups in Income and Savings,"
National Bureau of Economic Research, Inc, number kuzn50-1, 08.
- Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Income and Savings," NBER Books, National Bureau of Economic Research, Inc, number kuzn53-1, 08.
- 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, 09.
- Wu, Ximing, 2003. "Calculation of maximum entropy densities with application to income distribution," Journal of Econometrics, Elsevier, vol. 115(2), pages 347-354, August.
- Keane, Michael & Prasad, Eswar, 2001. "Social Transfers and Inequality During the Polish Transition," MPRA Paper 54326, University Library of Munich, Germany.
- Burkhauser, Richard V. & Butler, J. S. & Feng, Shuaizhang & Houtenville, Andrew J., 2004. "Long term trends in earnings inequality: what the CPS can tell us," Economics Letters, Elsevier, vol. 82(2), pages 295-299, February.
- Milanovic, Branko, 1995. "Poverty, inequality, and social policy in transition economies," Policy Research Working Paper Series 1530, The World Bank.
- Dale W. Jorgenson, 1998. "Did We Lose the War on Poverty?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 79-96, Winter.
- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
When requesting a correction, please mention this item's handle: RePEc:are:cudare:0977. 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: (Jeff Cole)
If references are entirely missing, you can add them using this form.