Creativity and Inequality: The Dual Path of China's Urban Economy?

Abstract

Utilizing Chinese data for the years of 1998, 2000, 2005, and 2008, this research traces the growth of the creative economy and the enlarging income inequality in China’s urban economy. While the creative sector now makes up close to 30 percent of China’s urban private employment, industry-based earnings disparity has also increased substantively. Provinces with larger creative economy also tend to have higher level of wage inequality among workers of the creative sector, the working sector, and the service sector. Several other factors, especially internal migration flow, size of manufacturing, and ownership structure in local economy, are found to be significantly linked to inequality as well.

Keywords: economic restructuring, knowledge economy, wage inequality, China

JEL Classification: J31