China's Income Distribution Over Time: Reasons for Rising Inequality
Texas A&M University - Department of Agricultural Economics
Jeffrey M. Perloff
University of California, Berkeley - Department of Agricultural & Resource Economics
We use a new method to estimate China's income distributions using publicly available interval summary statistics from China's 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. 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 rural-urban income gap have been equally responsible for the growth in overall inequality over the last two decades. However, the rural-urban 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) rose considerably.
Number of Pages in PDF File: 38
Keywords: Income distribution, inequality, China, rural and urban areas
JEL Classification: O15, O18, O53working papers series
Date posted: February 27, 2004
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo4 in 0.797 seconds