Wealth Accumulation and Distribution in Urban China
Under socialism it was neither possible nor necessary to accumulate significant levels of personal wealth. The acceleration of economic reform in the last decade, however, has brought dramatic increases in income and investment opportunities. Reform has also reduced social protections provided by the state welfare system. In response to these changes, between 1995 and 2002, urban average real household net total wealth increased by 24 per cent per annum. There is a concern, however, that those accumulating wealth are the economic and political elites while those unable to accumulate wealth are the most vulnerable workers who are losing social protection. Using Chinese urban survey data of 1995, 1999, and 2002, this paper investigates this issue. It is found that households with above average income have accumulated more wealth than their poorer counterparts. In addition, a large proportion of this wealth accumulation may be from non-earned sources, such as buying larger and better housing at highly subsidized prices. Furthermore, party members and their children have benefited a great deal from this fast wealth accumulation process. Although at lower rates, the poor and vulnerable have also been able to accumulate wealth.
|Date of creation:||Jan 2007|
|Date of revision:|
|Publication status:||published in: Economic Development and Cultural Change, 2007, 55 (4), 761-791|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- Kapteyn, Arie & Alessie, Rob & Lusardi, Annamaria, 2005.
"Explaining the wealth holdings of different cohorts: Productivity growth and Social Security,"
European Economic Review,
Elsevier, vol. 49(5), pages 1361-1391, July.
- Arie Kapteyn & Rob Alessie & Annamaria Lusardi, 1999. "Explaining the Wealth Holdings of Different Cohorts: Productivity Growth and Social Security," Tinbergen Institute Discussion Papers 99-069/3, Tinbergen Institute.
- Arie Kapteyn & R. Alessie & Annamaria Lusardi, 2003. "Explaining the wealth holdings of different cohorts: productivity growth and social security," Working Papers 01-03, Utrecht School of Economics.
- Kapteyn, Arie & Alessie, Rob & Lusardi, Annamaria, 1999. "Explaining the wealth holdings of different cohorts : productivity growth and social security," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Franco Modigliani & Shi Larry Cao, 2004. "The Chinese Saving Puzzle and the Life-Cycle Hypothesis," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 145-170, March.
- 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.
- Francisco H. G. Ferreira, 1999.
"Economic transition and the distributions of income and wealth,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 7(2), pages 377-410, July.
- Ferreira, Francisco H. G., 1997. "Economic transition and the distributions of income and wealth," Policy Research Working Paper Series 1808, The World Bank.
- Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 2003.
"Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets,"
The Review of Economics and Statistics,
MIT Press, vol. 85(3), pages 586-604, August.
- Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 1999. "Unemployment risk and precautionary wealth: evidence from households' balance sheets," Finance and Economics Discussion Series 1999-15, Board of Governors of the Federal Reserve System (U.S.).
- Christopher D Carroll & Karen E Dynan & Spencer D Krane, 1999. "Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets," Economics Working Paper Archive 416, The Johns Hopkins University,Department of Economics.
- Michael Alexeev, 1999. "The effect of privatization on wealth distribution in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 449-465, July.
- Garry F. Barrett & Stephen G. Donald, 2003. "Consistent Tests for Stochastic Dominance," Econometrica, Econometric Society, vol. 71(1), pages 71-104, January.
- Knight, J. & Shi, L., 1995. "Fiscal Decentralisation, Redistribution and Reform in China," Economics Series Working Papers 99168, University of Oxford, Department of Economics.
- Aart Kraay, 2000. "Household Saving in China," World Bank Economic Review, World Bank Group, vol. 14(3), pages 545-570, September.
- Hongbin Li & PakWai Liu & Junsen Zhang & Ning Ma, 2007.
"Economic Returns to Communist Party Membership: Evidence From Urban Chinese Twins,"
Royal Economic Society, vol. 117(523), pages 1504-1520, October.
- Li, Hongbin & Liu, Pak-Wai & Zhang, Junsen & Ma, Ning, 2006. "Economic Returns to Communist Party Membership: Evidence from Urban Chinese Twins," IZA Discussion Papers 2118, Institute for the Study of Labor (IZA).
- Davies, James B. & Shorrocks, Anthony F., 2000. "The distribution of wealth," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 11, pages 605-675 Elsevier.
- Knight, J. & Lina, S., 1990.
"The Determinants Of Urban Income Inequality In China,"
Economics Series Working Papers
9991, University of Oxford, Department of Economics.
- 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 123-54, May.
- 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.
- Meng, Xin, 2003. "Unemployment, consumption smoothing, and precautionary saving in urban China," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 465-485, September.
- Keith Griffin & Azizur Rahman Khan & Carl Riskin, 1999. "Income Distribution in Urban China during the Period of Economic Reform and Globalization," American Economic Review, American Economic Association, vol. 89(2), pages 296-300, May.
- Jonathan Morduch & Terry Sicular, 1998.
"Politics, Growth and Inequality in Rural China: Does It Pay To Join the Party?,"
Harvard Institute of Economic Research Working Papers
1832, Harvard - Institute of Economic Research.
- Morduch, Jonathan & Sicular, Terry, 2000. "Politics, growth, and inequality in rural China: does it pay to join the Party?," Journal of Public Economics, Elsevier, vol. 77(3), pages 331-356, September.
- John Giles & Kyeongwon Yoo, 2007. "Precautionary Behavior, Migrant Networks, and Household Consumption Decisions: An Empirical Analysis Using Household Panel Data from Rural China," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 534-551, August.
- 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.
- Wang, Yan, 1995. "Permanent Income and Wealth Accumulation: A Cross-Sectional Study of Chinese Urban and Rural Households," Economic Development and Cultural Change, University of Chicago Press, vol. 43(3), pages 523-50, April.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2553. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.