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Catching up with the West: Chinese Pathways to the Global Middle Class

Author

Listed:
  • Gustafsson, Björn Anders

    (Göteborg University)

  • Yang, Xiuna

    (China Development Research Foundation)

  • Sicular, Terry

    (University of Western Ontario)

Abstract

We investigate whether Chinese household incomes have caught up to those of the middle class in the developed world. Using nationwide survey data for 2002 and 2013, we find considerable catch up. Defining the global middle class as being neither poor nor rich in the developed world, we estimate that China's global middle class grew rapidly after 2002, reaching 250 million in 2013. We describe the characteristics of this middle class, which is predominately urban, in the eastern region, and wage-earning. A distinct business middle class exists but is relatively small. Analysis of the chances of attaining the middle class reveals the importance of an individual's circumstances at birth. Parents' education and occupation matter. Being born with an urban hukou provides a large advantage. For those born with a rural hukou, the most effective pathways to the middle class are migration and, if possible, obtaining an urban hukou.

Suggested Citation

  • Gustafsson, Björn Anders & Yang, Xiuna & Sicular, Terry, 2019. "Catching up with the West: Chinese Pathways to the Global Middle Class," IZA Discussion Papers 12345, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp12345
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    References listed on IDEAS

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    1. Li,Shi & Sato,Hiroshi & Sicular,Terry (ed.), 2013. "Rising Inequality in China," Cambridge Books, Cambridge University Press, number 9781107002913, November.
    2. World Bank & the People’s Republic of China Development Research Center of the State Council, 2013. "China 2030 : Building a Modern, Harmonious, and Creative Society," World Bank Publications - Books, The World Bank Group, number 12925, April.
    3. Branko Milanovic & Shlomo Yitzhak, 2006. "Decomposing World Income Distribution: Does The World Have A Middle Class?," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 2(2), pages 88-110.
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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