Changing Trends in China's Inequality: Evidence, Analysis, and Prospects

437 Pages·2020·4.277 MB·English

by  Terry Sicular, Shi Li, Ximing Yue, Hiroshi Sato

Changing Trends in China's Inequality: Evidence, Analysis, and Prospects
Terry Sicular (ed.) et al.
https://doi.org/10.1093/oso/9780190077938.001.0001
Published: 2020 Online ISBN: 9780190077969 Print ISBN: 9780190077938
FRONT MATTER
Copyright Page 
https://doi.org/10.1093/oso/9780190077938.002.0003 Page iv
Published: July 2020
Subject: Public Economics, Asian Economics D
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Library of Congress Cataloging-in-Publication Data
Names: Sicular, Terry, 1955– editor. | Li, Shi, editor. | Yue, Ximing, Sato, Hiroshi editor.
Title: Changing trends in China’s inequality : evidence, analysis,
and prospects / edited by Terry Sicular, Shi Li, Ximing Yue and Hiroshi Sato.
Description: 1st Edition. | New York : Oxford University Press, 2020. |
Includes bibliographical references and index.
Identi�ers: LCCN 2019034470 (print) | LCCN 2019034471 (ebook) |
ISBN 9780190077938 (hardback) | ISBN 9780190077952 (epub) |
ISBN 9780190077969 (online) | ISBN 9780190077945 (updf)
Subjects: LCSH: China—Economic conditions—2000– |
China—Social policy—21st century. | Equality—China.
Classi�cation: LCC HC427 .95 C43273 2019 (print) | LCC HC427 .95 (ebook) |
DDC 339 .2/20951—dc23
LC record available at https://lccn.loc.gov/2019034470
LC ebook record available at https://lccn.loc.gov/2019034471
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Changing Trends in China's Inequality: Evidence, Analysis, and Prospects
Terry Sicular (ed.) et al.
https://doi.org/10.1093/oso/9780190077938.001.0001
Published: 2020 Online ISBN: 9780190077969 Print ISBN: 9780190077938
FRONT MATTER
Contributors and Editors 
Published: July 2020
Subject: Public Economics, Asian Economics
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Sai DING, Professor, Institute of Ethnology and Anthropology, Chinese Academy of Social Sciences d fro
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Qin GAO, Professor, School of Social Work, Columbia University h
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Björn GUSTAFSSON, Professor, Department of Social Work, University of Götenburg; Research Fellow, ://a
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Institute for the Study of Labor (IZA) de
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Hisatoshi HOKEN, Professor, School of International Studies, Kwansei Gakuin University .ou
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John KNIGHT, Visiting Professor, Department of Economics, Business School, Beijing Normal University; m
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Emeritus Professor of Economics, University of Oxford o
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Shi LI, Professor, School of Public A�airs, Zhejiang University; Acting Director, China Institute for 6
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Income Distribution, Beijing Normal University; Research Fellow, Institute for the Study of Labor (IZA) /ch
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Xiaomin LIU, Associate Professor, Institute of Ethnology and Anthropology, Chinese Academy of Social r/3
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Sciences 79
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Chuliang LUO, Professor, Department of Economics, Business School, Beijing Normal University 6
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Lidan LYU, Associate Professor, Department of Demography, School of Sociology and Population Studies, n
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Renmin University of China rs
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Xinxin MA, Associate Professor, Faculty of Social Sciences, University of Toyama f E
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Hiroshi SATO, Professor, Graduate School of Economics, Hitotsubashi University u
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Yangyang SHEN, Lecturer, School of Economics and Resource Management, Beijing Normal University; n
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Researcher, China Institute for Income Distribution O
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Terry SICULAR, Professor, Department of Economics, University of Western Ontario e
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Jin SONG, Associate Professor, Institute of World Economics and Politics, Chinese Academy of Social 2
Sciences
Lina SONG, Professor, Business School, University of Nottingham
Haiyuan WAN, Associate Professor, Department of Economics, Business School, Beijing Normal
University
p. xxiv Yake WANG, Professor, School of Insurance and Economics, University of International Business and
Economics
Qingjie XIA, Professor, School of Economics, Peking University
Sui YANG, Assistant Professor, Rural Development Institute, Chinese Academy of Social Sciences
Xiuna YANG, Program O�cer, China Development Research Foundation
Ximing YUE, Professor, School of Finance, Renmin University of China
Fuhua ZHAI, Associate Professor, Graduate School of Social Service, Fordham University
Peng ZHAN, Assistant Professor, School of Economics, Nanjing University of Finance & Economics
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Figures
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1.1 Official estimates of China’s national Gini coefficient, 2003–2 017 18 lo
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1.2. Alternative estimates of China’s national Gini coefficient 19 d
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2.1. National income per capita by income decile: Level and change from 2007 m
to 2013 (yuan, %) 44 http
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2.2. China’s national Lorenz curves, 2007 and 2013 45 ://a
c
2.3. Notional graph of the true income distribution 62 ad
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m
3.1. China’s income distribution in 2002, 2007, and 2013 (RMB per ic
equivalized person per day) 87 .ou
p
3.2. Cumulative distributions of income for China as a whole, urban China, .co
m
and rural China, 2002, 2007, and 2013 (RMB per equivalized person per day) 88 /b
o
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3.3. Savings rate by ventile in the income distribution, 2013 95 k
/4
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3.4. The composition of income by class, 2013 96 5
6
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3.5. The size of the middle class by province plotted against provincial GDP /c
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per capita, household disposable income per capita, and the rate of p
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urbanization, 2013 (%) 100 r/3
4
4.1. Wealth Lorenz curves for urban households 120 79
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4.2. Wealth Lorenz curves for rural households 120 9
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4.3. Wealth Lorenz curves for national households 121 by
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4.4. Household wealth share by income per capita decile (%) 123 n
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4.5. Wealth/ income ratio by income per capita decile 127 rs
ity
4.6. Housing wealth/ income ratio per income per capita decile 128 of E
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4.7. Annual percentage increase in wealth by income per capita decile 129 s
e
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4.8. Housing price by common area in 2002 and 2013 131 u
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4.9. Increase in relative housing price by wealth per capita decile (%) 132 r o
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4.10. Savings rate by income per capita decile (%) 133 8
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4.11. Savings rate by wealth per capita decile (%) 134 cto
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5.1. Impact of social benefits on the economic distance between low- and r 2
high-i ncome households in urban China 158 02
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5.2. Impact of social benefits on the economic distance between low- and
high-i ncome households in rural China 160
x Figures
5.3. Impact of social benefits on the economic distance between low- and
high- income households among rural-t o- urban migrants in China 162
6.1. Real annual growth rates of income between survey rounds,
by income deciles 173
6.2. Gini coefficients of adjusted income per capita by region 175
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6.3. Shares of income components in total income 176 w
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6.4. Contributions of income components to income per capita inequality 177 ad
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6.5. Comparison of concentration coefficients of per capita income between fro
agriculture and wage earnings 178 m
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7.1. Head-count ratio trends in China, 1978‒2017 (%) 207 ttp
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7.2. Regional head-count ratios in China, 2014 212 ://a
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7.3. The relationship between the PPP price index and per capita GDP (log) de
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at the provincial level, 1990‒2013 216 ic
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7.4. The relationship between the PPP price index and per capita income (log) up
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at the provincial level, 1988–2 013 216 o
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8.1. Growth curves for urban China 249 /bo
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8.2. Gini coefficients for urban China, 1988, 1995, 2002, 2007, and 2013 251 /4
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8.3. Relative poverty rates for urban China, 1988, 1995, 2002, 2007, and 2013 253 60
/c
8.4. Cumulative density functions for urban China, 1988, 1995, 2002, 2007, ha
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and 2013 255 te
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8.5. Income components as relative shares of total income, 1988, 1995, 2002, 4
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2007, and 2013 (%) 256 2
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8.6. Concentration coefficients for various income components, 1988, 1995, 92
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2002, 2007, and 2013 259 y
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9.1. Share of food in overall consumption 283 niv
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9.2. Share of clothing in overall consumption 284 rsity
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9.3. Share of housing in overall consumption 284 f E
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9.4. Share of housing equipment and services in overall consumption 285 se
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9.5. Share of transportation and communications in overall consumption 286 us
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9.6. Share of education and entertainment in overall consumption 287 r o
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9.7. Share of health and medical care in overall consumption 288 8
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11.1. Shares of women and men with wage employment, by age (%) 331 to
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11.2. Female/ male wage ratio, by age (%) 337 r 2
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11.3. Female/ male wage ratio, by education (%) 338 22
11.4. Regression- based female/m ale wage ratio, by life-e vent groups (%) 346
Figures xi
11.5. Regression- based age- earnings profiles, 2007 and 2013
(constant 2013 prices) 348
11.6. Regression- based female/m ale wage ratio, by age (%) 349
11.7. Regression- based education-e arnings profiles (constant 2013 prices) 349
11.8. Regression- based female/m ale wage ratio, by level of education (%) 350 D
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12.1. Minimum-wage levels and estimates of the wage distributions. Panel n
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A: 1993– 1994 (MW policy promulgation period). Panel B: 1998– ad
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2002 (MW policy implementation period). Panel C: 2007–2 013 (MW d
policy enforcement period) 378 fro
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12.2. Estimates of the effects of the MW on wages by using the QR model 381 ttp
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Tables
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1.1. CHIP 2013 household sample: Composition by province and region 12 lo
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1.2. Classification of urban, rural, and migrant households in the d
CHIP 2013 survey 13 fro
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1.3. Composition of the CHIP sample among urban, rural, and migrant http
households 14 s
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2.1. National average household income per capita and income inequality, ca
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2007 and 2013 40 e
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2.2. National income inequality with and without spatial PPP adjustments, .o
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2007 and 2013 43 p
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2.3. National average household income per capita growth and composition, m
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2007 and 2013 46 o
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2.4. Decomposition of national inequality by income source, 2007 and 2013 48 /4
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2.5. Mean incomes and income inequality within rural, formal urban, and 0
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migrant household subgroups, 2007 and 2013 50 h
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2.6. Migrant household income per capita growth and composition, 2007 and te
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2013 52 4
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2.7. Estimates of the urban Gini coefficient excluding and including migrants, 30
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2007 and 2013 54 1
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2.8. Estimates of the national Gini coefficient excluding and including y U
migrants, 2007 and 2013 54 n
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2.9. The urban/ rural income gap, 2007 and 2013 55 rs
ity
2.10. Contribution of the urban/r ural income gap to national inequality (%) 58 of E
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2.11. Household CHIP income per capita by region and regional income gaps, s
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with and without spatial PPP adjustments, 2007 and 2013 59 x u
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2.12. Contribution of regional income gaps to national inequality (%) 60 r o
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2.13. Gini coefficients for the East, Central, and West regions, 2007 and 2013 60 1
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2.14. The urban/ rural income ratio for the East, Central, and West regions, c
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2007 and 2013 61 b
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2.15. Estimates of the national Gini coefficient incorporating the top-i ncome group 63 r 20
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A2.1. OLS estimates of the Pareto distribution 70
A2.2. Estimates of the population and distribution of income for the
top- income group 71
xiv Tables
A2.3. Incomes and inequality in the CHIP surveys 72
A2.4. Estimates of the national Gini coefficient incorporating the top-i ncome group 73
3.1. Classification of income classes, with comparisons to the literature 83
3.2. Cutoffs used in this study (per person per day, 2013 prices) 84
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3.3. The shares of the four income classes in China’s population as a whole, and o
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among the urban, rural, and migrant populations, 2002, 2007, and 2013 (%) 90 n
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3.4. Estimates of the Chinese middle class in the literature 92 de
d
3.5. The simulated shares of the four classes in 2013, assuming that the fro
m
incomes of all individuals grew at the same rate between 2007 and 2013 (%) 93 h
3.6. The simulated shares of the four classes in 2020, assuming that the ttps
incomes of all individuals grew at the same rate between 2013 and 2020 (%) 94 ://a
c
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3.7. Housing and ownership of consumer durables by income class, 2013 98 de
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3.8. Composition of the income classes by location, 2013 (%) 99 ic.o
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3.9. Composition of the classes by demographic variables, 2013 101 p.c
o
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3.10. Membership in the Chinese Communist Party by class and by urban/
/b
rural/ migrant in 2013 (%) 102 oo
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3.11. Communist Party members belonging to each class in 2013 (%) 102 /40
5
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4.1. Gini coefficient of wealth and income inequality 112 0
/c
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4.2. Level and growth of wealth per capita 116 ap
te
4.3. Structure of household wealth by type of wealth asset (%) 119 r/3
4
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4.4. Household wealth share by wealth decile (%) 119 9
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4.5. Wealth Gini coefficients, 2002 and 2013 121 11
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4.6. The sensitivity of wealth level and wealth inequality to the tails of the y
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wealth distribution 122 n
iv
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4.7. Household wealth inequality and its decomposition, 2002 124 rs
ity
4.8. Household wealth inequality and its decomposition, 2013 125 o
f E
4.9. National wealth inequality decomposition: Urban and rural 126 ss
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x
4.10. Growth of net housing per capita: Simulation with deflated housing prices 130 u
s
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4.11. Growth of household net wealth per capita, 2002–2 013: Simulation with r o
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deflated housing prices 130 1
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4.12. Impact of relative housing price inflation on wealth inequality 132 O
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4.13. Income from wealth as a share of household income 135 be
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4.14. Simulated correction for nonresponse by the wealthy in 2013 137 0
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4.15. Simulated correction for nonresponse plus underreporting by the wealthy
in 2013 138
Tables xv
5.1. Sample sizes of the China Household Income Project (CHIP) survey, by year 152
5.2. Size and structure of social benefits measured as a percentage of
household final income (%) 155
6.1. Income per capita and the Gini coefficients for rural households 172
6.2. Shares of net transfer income by region and decile (%) 181 D
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6.3. Major pro- rural public policies in the 2000s 183 n
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6.4. Classifications of the pro-r ural public transfers in this study 185 de
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6.5. Tax rates by region and decile (%) 187 fro
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6.6. Shares of rural households that received specific types of social security, 2013 188 h
ttp
6.7. Shares of beneficiary households among all rural households, 2013 189 s://a
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6.8. Comparison of per capita income Gini coefficients with and without a
d
public transfers, 2002–2 013 192 em
ic
6.9. Per capita income Gini coefficients with and without specific public .o
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transfers, 2013 193 p.c
o
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6.10. Poverty index with and without specific public transfers, 2013 194
/b
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7.1. Poverty standards, yuan per person per year 204 ok
/4
7.2. Poverty head- count ratios, World Bank standards, 1988‒2013 (%) 208 05
6
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7.3. Poverty head- count ratios, NBS standards, and relative standards, /c
h
1988‒2013 (%) 209 ap
te
7.4. Regional head-c ount ratios, new poverty level, 1988‒2013 (%) 213 r/3
4
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7.5. Poverty head- count ratios with PPP adjustments, World Bank standards, 9
3
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1988‒2013 (%) 215 1
1
2
7.6. Poverty head- count ratios with PPP adjustments, NBS standards, b
y
1988‒2013 (%) 217 U
n
iv
7.7. The impact of regional prices on poverty head-c ount ratios, 1988‒2013 219 e
rs
7.8. Income sources in poor and non-p oor households 220 ity o
7.9. The poverty reduction effects from transfer income, 2013 221 f Es
s
e
7.10. The structure of consumption for poor and non-p oor households (%) 222 x
u
s
7.11. Ratio of various types of consumption to disposable income (%) 224 er o
n
7.12. Characteristics of poor and non-p oor households, 2002‒2013 226 1
8
7.13. Results of the probit models, 2002 and 2013 228 O
c
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A7.1. Poverty estimates in the existing literature, 2002‒2015 235 be
r 2
A7.2. Results of the probit models, part A, 2002 and 2013 237 0
2
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A7.3. Results of the probit models, part B, 2002 and 2013 239