Income and Wealth Inequality in Hong Kong, 1981-2020: The Rise of Pluto-Communism?

64 Pages Posted: 19 Jul 2021 Last revised: 3 May 2022

See all articles by Thomas Piketty

Thomas Piketty

Paris School of Economics (PSE)

Li Yang

Paris School of Economics

Date Written: June 1, 2021

Abstract

In this paper, we aim to better understand the evolution and institutional roots of Hong Kong’s growing economic inequality and political cleavages. The main findings of this paper are twofold. First, by combining multiple sources of data (household surveys, fiscal data, wealth rankings, national accounts) and innovative methodologies, we conduct a comprehensive analysis of the evolution of wage inequality, the capital share, as well as the concentration of top wealth in Hong Kong. Our evidence suggests a very large rise in income and wealth inequality in Hong Kong over the last four decades. Second, based on the latest opinion poll data, we provide evidence suggesting that business elites, who carry disproportionate weight in Hong Kong’s Legislative Council, are more likely to vote for pro-establishment camp to ensure that policies are passed that protect their political and economic interests. We argue that the unique alliance of government and business elites in a partial democratic political system is the institutional root of Hong Kong’s rising inequality and political cleavages.

Keywords: Hong Kong, Wage Distribution, Capital Share, Wealth Inequality, Political Cleavage

JEL Classification: D31, D63, H24, J31, P16

Suggested Citation

Piketty, Thomas and Yang, Li, Income and Wealth Inequality in Hong Kong, 1981-2020: The Rise of Pluto-Communism? (June 1, 2021). Available at SSRN: https://ssrn.com/abstract=3888118 or http://dx.doi.org/10.2139/ssrn.3888118

Thomas Piketty

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Li Yang (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
E201, Building E, 2nd floor
Paris, 75014 75014
France
0769889925 (Phone)

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