THE URBAN–RURAL INCOME GAP AND INEQUALITY IN CHINA

Using new household survey data for 1995 and 2002, we investigate the size of China's urban–rural income gap, the gap's contribution to overall inequality in China, and the factors underlying the gap. Our analysis improves on past estimates by using a fuller measure of income, adjusting for spatial price differences and including migrants. Our methods include inequality decomposition by population subgroup and the Oaxaca–Blinder decomposition. Several key findings emerge. First, the adjustments substantially reduce China's urban–rural income gap and its contribution to inequality. Nevertheless, the gap remains large and has increased somewhat over time. Second, after controlling for household characteristics, location of residence remains the most important factor underlying the urban–rural income gap. The only household characteristic that contributes substantially to the gap is education. Differences in the endowments of, and returns to, other household characteristics such as family size and composition, landholdings, and Communist Party membership are relatively unimportant.     

HOUSEHOLD INEQUALITY AND THE LABOR MARKET IN SOUTH AFRICA

There has been very little detailed exploration of the relationship between wage income and household inequality in South Africa despite the relevance of this issue for many contemporary growth and development policy debates. This article is directed at such an analysis. It uses a decomposition of household income inequality by income components to highlight the dominance of wage income in driving overall income inequality. This is followed by a detailed discussion of the distribution of the unemployed across different wage-earning household categories. Many of the unemployed are seen to depend on wage earners within their households, but a significant percentage of the unemployed, especially in rural areas, have no direct link to labor market earners. In such cases, the creation of employment is essential. The conclusion explores policy implications by linking our empirical findings to South African debates over the quality versus the quantity of employment.     

THE STRUCTURE OF THE EARNINGS DISTRIBUTION: HOW ARE HOUSEHOLDS AND INDIVIDUALS RELATED?*

This paper investigates the links between individual and household distributions of earnings. Using a sample of 1991 data from the UK, considerable complexity is uncovered in the structure of the household earnings distribution. This is due to heterogeneity of earners and positive ‘clustering’ of earners within households. The structure of the clustering behaviour of earners for different household types is estimated, and the contribution of clustering to overall earnings inequality is evaluated. Perhaps surprisingly in view of the observed clustering behaviour, it is found that clustering has reduced overall inequality, although the mean-adjusted distribution of individual earnings is insignificantly different from the distribution of household earnings.     

贫富差距、供求弹性与房价*

近些年，中国的贫富差距和房价居高不下，但现有文献忽视供求弹性与贫富差距交互作用对房价的影响。据此，本文构建结合贫富差距和供求弹性的住房存量调整模型，使用中国2002—2012年7省份33个城市的UHS数据发现，收入和财富的基尼系数对房价有正影响；供求弹性对房价分别有负影响和正影响；收入和财富基尼系数与供求弹性交互项对房价分别有正影响和负影响。据此，为防止房价泡沫，各级政府一方面应缩小贫富差距，另一方面应增加土地和住房供给。     

ESTIMATING THE INEQUALITY OF HOUSEHOLD INCOMES: A STATISTICAL APPROACH TO THE CREATION OF A DENSE AND CONSISTENT GLOBAL DATA SET

The deficiencies of the Deininger and Squire data set on household income inequality are well known to include sparse coverage, problematic measurements, and the combination of diverse data types into a single data set. Yet many studies have relied on this data due to the lack of available alternatives. In this paper we show how the UTIP-UNIDO measures of manufacturing pay inequality can be used, with other information, to estimate measures of household income inequality. We take advantage of the systematic relationship between the UTIP-UNIDO estimates and those of Deininger and Squire. The residuals from this exercise provide a map to problematic observations in the Deininger and Squire data, and the estimated coefficients provide a way to construct a new panel data set of estimated household income inequality. This new data set provides comparable and consistent measurements across space and through time.     

MICROECONOMIC REFORM AND INCOME DISTRIBUTION: THE CASE OF AUSTRALIAN PORTS AND RAIL FREIGHT

We analyze structural changes in the Australian ports and rail freight industries that were driven by microeconomic reform; we find such reforms may generate welfare gains with reduced inequality. We estimate the effects on household income groups of these industry changes by applying a computable general equilibrium model incorporating microsimulation behavior. The structural changes lead to a small increase in household welfare in most regions, with an overall increase of 0.18%, and a small decrease in inequality. Our analysis suggests that policy makers in Australia and other high‐income nations should give serious consideration to microeconomic reform of infrastructure industries. (JEL C68, C69, D31, L92)     

PRICES,INEQUALITY, AND POVERTY: METHODOLOGY AND INDIAN EVIDENCE

This paper uses a methodology for evaluating the distributional implications of price movement for inequality and poverty measurement. The methodology is based on a distinction between inequalities in nominal and real expenditure. The conversion of nominal to real expenditure takes into account the varying household preferences. The empirical application to the Indian budget datasets from NSS rounds 50, 55, and 61 shows the usefulness of the proposed procedures. The relative price changes in India have tended to be inequality and poverty reducing as confirmed by formal statistical tests. The result is robust to expenditure dependent equivalence scales. The progressivity of the relative price changes weakened in the second half of our time period as Fuel and Light overtook the composite group called “Miscellaneous” in recording the largest price increase. While the poverty rates registered a decline, which was marginal in the urban areas, there was a sharp increase in inequality.     

Exploring the link between household debt and income inequality: an asymmetric approach

We investigate the relationship between household debt and income inequality in the USA, allowing for asymmetry, using data over the period 1913–2008. We find evidence of an asymmetric cointegration between household debt and inequality for different regimes. Our results indicate household debt only responds to positive changes in income inequality, while there is no evidence of falling inequality significantly affecting household debt. The presence of this asymmetry provides further empirical insights into the emerging literature on household debt and inequality.     

POPULATION AGING AND CONSUMPTION INEQUALITY IN JAPAN

This paper analyses how consumption inequality within a fixed cohort grows with age using Japanese household microdata. Following the method developed by Deaton and Paxson (1994), we obtain the following results. First, consumption inequality starts to increase at the age of 40. Second, younger generations face a more unequal distribution from the beginning of their life-cycle. Third, half of the rapid increase in the economy-wide consumption inequality during the 1980s was caused by population aging, while one-third was due to the increasing cohort effect. The paper compares the above results with those of Deaton and Paxson.     

INEQUALITY AND AGGREGATE DEMAND IN THE IS‐LM AND IS‐MP MODELS

This paper presents an extension to the textbook IS‐LM and IS‐MP models that allows the short run effects of an increase in household income inequality to be studied in a simple manner. The income distribution is assumed to be log‐normal, and the coefficient of variation of income is assumed to be exogenous. The latter is used as the measure of income inequality, and enters otherwise standard IS and LM curves in a straightforward manner. While the models are highly stylised, they can easily be extended to more complicated variants.     

TECHNOLOGICAL CHANGE, INEQUALITY AND WORK SHARING

The effects of technological change on wage inequality are usually studied under the assumption of exogenous supplies of skilled and unskilled workers. Moreover, in these studies there is no distinction between the stock (number of workers) and the flow (hours of work) dimension of labour services. In the present paper, we construct a model in which hours of work and technological change affect both the (relative) demand and supply of unskilled workers. The labour supply of unskilled workers (numbers of persons) is derived from a model of household labour supply in which households differ regarding the disutility suffered when both household members work. Combining together the (relative) supply and demand parts of the model we are able to establish technological change (either biased or neutral) as a plausible explanation of recent trends in wage inequality.     

CHINESE REGIONAL INEQUALITIES IN INCOME AND WELL-BEING

Dividing China into seven regions reveals rural income and consumption divergence for both 1980–2005 and 2000–05. But while real rural consumption growth averaged 7.7 percent over 1985–2005 in the eastern coastal region, it averaged 6.5 percent uniformly in the interior. In evaluating well-being, such rapid improvement in all regions arguably overshadows negative connotations of divergence. Twenty years of household survey data reveal dramatic increases in rural household savings, as rural consumption improved more slowly than income in some periods. This raises questions about the suitability of consumption as a basis for measuring well-being and its distribution. Increased savings appear to be transient, as some households save while others dissave to purchase durables and afford lumpy services like education and healthcare—supplies of which became more plentiful in the 1990s. The paper argues that more meaningful measures of regional disparities come from differences in regional poverty headcounts. It also suggests that higher regional inequality and accompanying interregional migration indicate that inequality plays an important positive role in inducing economic actors voluntarily to move to more productive locations and activities as a mechanism for ensuring sustainable improvements in individual well-being.     

HOUSEHOLDS, STANDARD OF LIVING, AND INEQUALITY

The standard of living of individuals does not depend so much on the income they themselves earn as on the total income of the household to which they belong and how the household organizes the use of its income. It is important to develop methods of income analysis which incorporate the household factor. In income distribution analysis, it is now common to take into consideration household size and composition in relative interpretations of income levels. In this paper it is suggested that the same methodology can be used for the purpose of absolute interpretations of income levels. The result is an alternative to per capita measures of standard of living which is sensitive not only to national income and population size, but also to household formation. This approach is applied to Norwegian data for the period from 1970 to 1986 as to trends in the average standard of living and standard of living inequality, and the redistributive impact of transfer and tax policies.     

Spain is different: Falling trends of inequality

In this article we characterize the evolution of inequality in hourly wages, hours of work, labor earnings, household disposable income and household consumption for Spain between 1985 and 2000. We look at both the Encuesta Continua de Presupuestos Familiares and the European Household Community Panel. Our analysis shows that inequality in individual net labor earnings and household net disposable income has decreased substantially. The decreases in the tertiary education premium and in the unemployment rate have been key ingredients to understand this falling trend. Public transfers have played a crucial role in smoothing out the inequality arising in the labor market, but instead the Spanish family does not seem to have been an important insurance mechanism. Regarding household consumption, inequality has fallen much less than inequality in household net disposable income, with the decrease mostly concentrated in the second half of the eighties. This suggests that the reduction in income inequality has affected the sources of permanent differences between households only during the second half of the eighties. Our estimates of the earnings process for the period are consistent with this view.     

收入不平等与家庭借贷行为*——家庭为追求社会地位而借贷的动机真的存在吗

本文利用中国家庭金融调查(CHFS)2011年度的调查数据,考察了收入不平等对家庭借贷行为的影响,并验证了家庭是否存在为追求社会地位而借贷的动机。研究表明：（1）收入不平等并不是影响家庭是否借贷的主要因素,但是对家庭的负债规模存在十分显著的抑制作用;（2）收入不平等的扩大并不会促使中低收入家庭寻求借贷或提升家庭负债规模,我国家庭并不存在为了追求更高的社会地位而进行借贷的动机;（3）收入不平等的扩大有利于高收入家庭获得更多的正规金融借贷,中低收入家庭则会较多地依赖于非正规金融借贷;（4）户主的人口统计学特征、家庭经济特征以及家庭所处地区特征均是影响家庭借贷行为的重要因素,在正规金融和非正规金融市场上,影响家庭借贷行为的因素存在较明显的差异。     

THE DISTRIBUTIONAL CONSEQUENCES OF GOVERNMENT SPENDING AND TAXATION IN THE U.S., 1989 AND 2000

We assess the effects of government expenditures and taxation on household economic well-being in the United States in 1989 and 2000. Net government expenditure is estimated as the difference between government expenditures incurred on behalf of the household sector—transfers and public consumption—and the taxes paid by that sector. We incorporate the estimates of net government expenditures into a wealth-adjusted measure of income. We find that overall inequality in our income measure is considerably reduced by net government expenditures. Results from decomposition analysis show that the inequality-reducing effect of net government expenditures owed more to expenditures than to taxes.     

The impact of natural disasters on household income,expenditure, poverty and inequality: evidence from Vietnam

Natural disasters are expected exacerbate poverty and inequality, but little evidence exists to support the impact at household level. This article examines the effect of natural disasters on household income, expenditure, poverty and inequality using the Vietnam Household Living Standard Survey in 2008. The effects of a natural disaster on household income and expenditure, corrected for fixed effects and potential endogeneity bias, are estimated at 6.9% and 7.1% declines in Vietnamese household per capita income and expenditure, respectively. Natural disasters demonstrably worsen expenditure poverty and inequality in Vietnam, and thus should be considered as a factor in designing poverty alleviation policies.     

Multidimensional welfare distributions: empirical application to household panel data from Vietnam

This article explores the empirical application of theoretical multidimensional welfare distribution analysis techniques to real household welfare distributions. The article operationalizes recent conceptual developments in multidimensional distribution theory and assesses their usefulness for the measurement of multidimensional household inequality. The results strongly highlight the importance of bringing nonmonetary aspects of household welfare into the forefront of inequality analysis. Agreement over the various approaches to the measurement of multidimensional inequality entails, however, nontrivial decisions that may limit the practical usefulness of these measures. We suggest that the use of multidimensional inequality ranges and the application of restrictive dominance criteria to multidimensional welfare distributions may open significant scope for further developments in the empirical analysis of multidimensional inequality.     

Household Debt,Consumption, and Income Inequality

Using the Johansen and Engle–Granger cointegration tests, we show that there is one cointegrating relationship between household debt, consumption, and income inequality in the United States for the period from 1929 to 2009. Given this result, we use a Vector Error-Correction model to further understand the dynamics among the three variables. Results indicate that increases in income inequality and consumption directly contribute to increases in household debt. Interestingly, the results reveal some feedback from household debt to income inequality. We also show that debt-driven consumption should be viewed with caution as the results show that increases in household debt correspond with future declines in the rate of consumption.     

Employment polarisation and inequality in the UK and Hungary

This paper uses household budget survey microdata to explorethe growth in household income inequality in Hungary in theperiod 1987–1995, and compares it with inequality in theUK in 1995–96. Decomposition of inequality according toboth household characteristics and income sources shows that,while inequality did grow rapidly in Hungary over the earlyTransition period, several factors prevented its growth to higherlevels. One of these factors, the distribution of employmentand earnings between households, is explored in some detail.While there was considerable polarisation between householdswith and without employed members in the UK in 1995–96,this was less of a feature in Hungary, in spite of a massivewithdrawal of men and women from the labour market between 1987and 1995. Rather, a narrowing of the gender pay gap and a continuedhigh level of female participation in employment appears tohave ensured that, even as earnings inequality in Hungary increasedto the extent that it surpassed earnings inequality in the UK,the distribution of household earnings, and the distributionof household incomes, remained more equal in Hungary.