Wage growth and inequality in urban China: 1988–2013

We investigate the evolution of wage levels, wage inequality, and wage determinants among urban residents in China using China Household Income Project data from 1988, 1995, 2002, 2007, and 2013.Average wage grew impressively between each pair of years. Wage inequality had long been on the increase, but between 2007 and 2013 no clear changes occurred. In 1988, age and wages were positively related throughout working life, but more recently older workers' wages have been lower than those of middle-aged workers. The relationship between education and wages was weak in 1988 but strengthened rapidly thereafter—a process that came to a halt in 2007.During the period in which China was a planned economy the gender wage gap was small in urban China, but it widened rapidly between 1995 and 2007. We also report the existence of a premium for being employed in a foreign-owned firm or in the state sector.     

The rise and fall of worldwide income inequality, 1820–2035

The development process and the demographic changes that are a central element of it explain both the nearly two centuries of increasing income inequality prior to 2000 and the reversal of this trend that followed. There are at least four phases of the development process: (1) Malthusian pre-development, (2) initial growth, (3) improved productivity, and (4) receding growth. Prior to the industrial revolution, the entire world was in the Malthusian Phase 1. During 1820–1950, about 20 countries, mostly in Western Europe, North America, and Oceania, moved out of Phase 1 and began to grow more rapidly. But, per capita income levels in the rest of the world continued to stagnate and worldwide income inequality widened continuously for at least 150 years following the Industrial Revolution. Around 1960, developing countries began to escape the Malthusian trap and move into Phase 2 of development. By the latter part of the 20th century, many developing countries were achieving growth rates equal to or greater than the high-income countries, slowing the rise in inequality. By 2000–2015 most developing countries were in either Phases 2 or 3 of development, while most of the high-income countries were moving into Phase 4, leading to a sharp reduction in worldwide income inequality. The recent reductions in worldwide income inequality are likely to continue in the near term because of the continuation of the more favorable demographic changes in developing compared to high-income countries.     

Capital income taxation of Swedish households, 1862–2010

This study describes the evolution of capital income taxation, including corporate, dividend, interest, capital gains and wealth taxation, in Sweden between 1862 and 2010. To illustrate the evolution, we present annual time-series data on the marginal effective tax rates on capital income (METR) for a marginal investment financed with new share issues, retained earnings or debt. These data are unique in their consistency, thoroughness and time span. We identify four tax regimes separated by shifts in economic policy. The first regime stretches from 1862 until the Second World War. The METR is low, stable and does not exceed 5% until the First World War, when the METR begins to drift upwards and varies depending on the source of finance. The outbreak of the Second World War establishes the second regime, when the magnitude and variation of the METR sharply increase. The METR peaks during the third regime in the 1970s and 1980s and often exceeds 100%. The 1990–1991 tax reform represents the beginning of the fourth regime, which is characterised by lower and smaller variations in the METR. The METR varies between 15% and 40% at the end of this period.     

Inequality of opportunity in household income,China 2002–2018

This study contributes to the literature on inequality of opportunity (IOp) in China by covering a longer and more recent span of time, employing better measures of given characteristics, and analyzing IOp for household income per capita with comparisons to individual income. Furthermore, it analyzes how IOp differs between the rural- and urban-born, and how IOp changes across birth cohorts and with age. We use 2002, 2013 and 2018 data from the Chinese Household Income Study and focus on income inequality among working-age persons. We find that IOp in China declined, especially between 2013 and 2018. In 2002 the large contributors to IOp were region, hukou type at birth, and parents' characteristics. In 2018 the contributions of region, hukou type at birth and parents' occupation had decreased, but that of parents' education had increased. We find that IOp is larger among those born in rural than urban China. Furthermore, IOP's contribution to total inequality within each birth cohort is highest earlier in individuals' work lives and declines with age. IOp is higher for older than younger birth cohorts, reflecting that younger cohorts have benefited from increased opportunities associated with China's reforms and opening up.     

Understanding the role of homeownership in wealth inequality: Evidence from urban China (1995–2018)

Many scholars have evaluated the wealth creation effects of homeownership over different time periods and have agreed on the positive role of homeownership. However, there are no consistent mechanisms to measure the impact of homeownership on wealth inequality. Based on data from 1995 to 2018, this paper finds that the expansion of the homeownership rate in urban China was an equalizing force in the distribution of wealth from 1995 to 2008, driven by the increased homeownership and housing acquisition of low- and moderate-income households (LMIs) during the era of housing reform in the 1990s. The forces were exogenous and dominated by a redistributive logic. In the post-reform era after 2008, the decline in the homeownership rate led to a concentration of wealth distribution that was driven by the widening wealth gap between owners and non-owners, which represented an endogenous market force. The results indicate that there was an apparent discontinuity of the trends of homeownership and wealth inequality because new immigrants could not afford the price of housing in the cities. The wealth position of the middle and lower classes (mainly new immigrant non-owners) was crippled, not only by the inaccessibility of homeownership, but also by the reinforcing effect of the increase in housing prices. This study reveals the different mechanisms of homeownership on wealth inequality and the policy implications for the redistributive effects of the allocation of housing resources.     

The role of infrastructure in China’s regional economic growth

This study investigates the relationship between infrastructure capital and China's regional economic growth for the period 1990–2013. Four types of infrastructure are considered: electricity generating capacity, roadway, railway, and telecommunications. Using a vector error correction model, we find mixed support across time period and region for the contribution of infrastructure investment to economic development. With regard to road construction in lagging regions in particular, the impact appears to have become negative under a program of ramped up efforts. The results resonate with the theoretical literature on the inverse U-shaped relationship between infrastructure investment and growth which posits a “crowding-out effect” of private capital when infrastructure investment becomes too dominant.     

Residual wage inequality in urban China, 1995–2007

We use three waves of urban household survey from 1995 to 2007 to investigate the trends of residual inequality and its determinants. First, we find that the enlargement in both the overall and residual inequality was larger at the upper half of the wage distributions between 2002 and 2007. Between 1995 and 2002, however, it is the lower half that experienced larger increase in inequality. Second, by using two complementary semi-parametric methods, we find that composition effect is negligible. Instead, the change in skill prices plays a dominant role in the rise of residual inequality. Finally, by constructing a panel data at the city level, we find that ownership restructuring is an important factor that has caused the skill price to rise, especially in the earlier period. Another finding is that China's export share of GDP has a positive effect on the enlargement of residual wage inequality, especially in the period from 2002 to 2007.     

Do households smooth expenditure over anticipated income changes? Evidence from bonus payments to public employees in Japan

This paper provides new evidence of consumers’ reaction to an anticipated sizable change in income. Until FY2002, Japanese public employees received predictable large bonus payments three times a fiscal year (in June, December, and March), but the March bonus was abolished in FY2003. We compare the seasonal patterns of public employees’ expenditure before and after the reform of the bonus payment schedule. Contrary to the prediction of the life cycle/permanent income hypothesis (LC/PIH), we find evidence that monthly patterns of household expenditure were significantly affected by the anticipated large change in income pattern. However, at closer inspection, this excess sensitivity of expenditure is observed only for expenditure subcategories of some durability, i.e., durables and semi-durables. Thus, while the LC/PIH does not appear to hold for expenditure (which we observe here), it may still hold for consumption.     

The mobility of top earnings,income, and wealth in China: Facts from the 2011–2017 China household finance survey

We document rich facts of the intra-generational mobility of households in the top fractiles of earnings, income, and wealth distributions in China using the panel data of the 2011–2017 China Household Finance Survey. We find high mobility co-exists with high inequalities within various top fractile groups. In specific, persistence rates of the top 1% group implied an inverted-U pattern for top earnings mobility, a declined trend of top income mobility, and an improved trend for top wealth mobility during the study period. Although the overall trends of mobility for top earnings, income, and wealth showed diverse patterns, they are still considered high from global comparisons. Besides, the top 1% households generate significantly more income from business and allocate a higher fraction of their assets to private equity.     

The role of the engineer in Danish modernisation, 1850–1920

Abstract

The article attempts to assess the role of engineers in the modernisation of Denmark in the period 1850 to 1920. Using both quantitative and qualitative evidence, it argues that though it is hardly possible in absolute terms to measure the influence of the engineers, it is possible to reach some indicative conclusions.

By looking at the position before 1850 and the periods 1850–1890 and 1890–1920 and using statistics on the employment of the engineers graduating from Polyteknisk Lareanstalt in Copenhagen, it is clear that these professional engineers affected society in a number of ways. The influence of engineers on the growing Danish industry has hitherto been presumed to be only minor. but this view needs some correction. As early as the 1870s and 1880s professional engineers played an important part in the largest Danish industrial firms, and prior to that held important positions in the new, technologically-pioneering, Danish industries. Danish engineers also influenced the State s telegraph service, the railways, gas- and water works, and town planning.

That, too, a considerable number of the early graduates from Polyteknisk: Lcereanstalt worked as teachers had no small importance, as, until some time after the mid nineteenth century, the teaching of the natural sciences in Denmark was sporadic and of uneven quality.     

The changing role of agriculture with economic structural change – The case of China

We analyze the implication of structural change to the evolving role of agriculture using China as an example. By combining a growth decomposition exercise with Input-Output (IO) and CGE model analyses using China's seven input-output tables (IOTs) in 1987–2017, the evolving role of the agriculture is quantitatively measured. The growth decomposition analysis shows that between 1978 and 2017, China doubled the size of its total labor force, while the absolute number of agricultural workers falls in this period. Rising labor productivity in agriculture has led to rapid agricultural growth without increasing agricultural employment, allowing agriculture to indirectly contribute to the economywide productivity growth through structural change.The measurement of economic integration using an IO approach helps to explain why China's rapid structural change has been accompanied by similar rapid productivity growth within each sector. The general equilibrium effect of structural change on the evolving role of agriculture is further assessed using two CGE models representing the initial (1987) and end (2017) years of a period of 30 years. Similar agricultural productivity shock induces a smaller economywide gain in 2017 than in 1987 in the CGE models, while the gap in the general equilibrium gain between these two years is much smaller than the difference in agriculture's size of the economy in the two years because of stronger linkages between agriculture and the rest of the economy in 2017. About 0.5 unit additional nonagricultural value-added is associated with a unit agricultural value-added increase in 1987, while additional gains in nonagricultural value-added rise to 2.7 unit in 2017.Our analysis of economic integration and implication of structural change to the evolving role of agriculture emphasizes the supply side role for sustainable growth in which agriculture continues to play an important but different role from the past when the demand side effects were stronger. Policies to strengthen supply side linkages have been emphasized in the recent years in China. Exploring further integration between agriculture and the rest of the economy should be part of the new growth strategy.     

Glass ceiling effect in urban China: Wage inequality of rural-urban migrants during 2002–2007

The paper studies the levels and changes in wage inequality among Chinese rural-urban migrants during 2002–2007. Using data from two waves of national household surveys, we find that wage inequality among migrants decreased significantly between 2002 and 2007. Our analysis on the wage distribution further shows that the high-wage migrants experienced slower wage growth than middle- and low-wage migrants—a primary cause of declining inequality of migrants. By using distributional decomposition methods based on quantile regression, we find that an overall between-group effect dominates in the whole wage distribution, which means that the change in returns to the characteristics (education, experience and other employment characteristics) plays a key role, but on the upper tails of the wage distribution, the within group effect (residual effect) dominates, implying that the unobservable factors or institutional barriers do not favor the migrants at the top tail of the wage distribution. We also study wage differential between migrants and urban natives, and find that though the wage gap is narrowed, the gap at the upper wage distribution is becoming bigger. Overall, the results suggest that there exists a strong “glass ceiling” for migrants in the urban labor market.     

Persistent but not consistent: The growth of national income in Holland 1347–1807

In this paper we construct a detailed dataset of the national accounts of Holland (1347–1807). Using this dataset, we demonstrate that this economy was characterized by persistent economic growth caused by, depending on the period, structural change (share of industry and services in the economy increases), technological development, and factor substitution. During the entire period GDP per capita increased by on average 0.19% per year. This persistent growth, however, was highly unstable due largely to the importance of international services in the economy.     

The Trend of Logistics Development in China

Logistics as the third source of the profit that has drawn more and more attention from the manufacture industry, circulation industry, etc. In this paper, after positively analyzing on the current logistics situation at home and abroad and the exist experiences of the developed countries, the authors pointed out the future development of logistics industry in our country, especially in the external contract of enterprises, value-added services in logistics field, electronic logistics, reorganization storm, etc.     

The development of Media Economics in China

The media economics in China started in 1978.At the Third Plenum of 11th Central Committee of CPC(1978), Chinese govern- ment made the policy of reform and opening up to the outside world, the nation’s economic development determined as the principal tas…     

The visible hand: the role of government in China’s long-awaited industrial revolution

China is undergoing its long-awaited industrial revolution. There is no shortage of commentary and opinion on this dramatic period, but few have attempted to provide a coherent, in-depth, political-economic framework that explains the fundamental mechanisms behind China’s rapid industrialization. This article reviews the Embryonic Economic Development theory put forth by Wen (2016a). This article reviews the Embryonic Economic Development theory put forth by Wen . It illuminates the critical sequence of developmental stages since the reforms enacted by Deng Xiaoping in 1978: namely, small-scale commercialized agricultural production, proto-industrialization in the countryside, a formal industrial revolution based on mass production of labor-intensive light consumer goods, a sustainable ‘industrial trinity’ boom in energy/motive power/infrastructure, and a second industrial revolution involving the mass production of heavy industrial goods. This developmental sequence follows essentially the same pattern as Great Britain’s Industrial Revolution, despite sharp differences in political and institutional conditions. One of the key conclusions exemplified by China’s economic rise is that the extent of industrialization is limited by the extent of the market. One of the key strategies behind the creation and nurturing of a continually growing market in China is based on this premise: The free market is a public good that is very costly for nations to create and support. Market creation requires a powerful ‘mercantilist’ state and the correct sequence of developmental stages; China has been successfully accomplishing its industrialization through these stages, backed by measured, targeted reforms and direct participation from its central and local governments.     

The Development of TV ＆ Internet in China

By reviewing the historical development process of TV ＆ Internet and comparing the different characteristics and functions of the two most important mass media in the 21st century, the paper focuses on the crucial competition and challenge between them and then puts forward some constructive innovation strategies on how to manage and develop the two mass media more effectively and more harmoniously for a wide and prosperous future.     

The Application of Accounting Conservatism Principle in China

The accounting conservatism principle is a key principle observed in the enterprises＇ accounting and publishing information. The conservatism principle has been widely used in the accounting principles and the accounting systems. This paper aims at analyzing and discussing the practical application of the conservatism principle in China by combining the theory with practice.     

Economic transition and the determinants of self-employment in urban China: 2007–2013

Abstract

Why was there a large growth in self-employment in urban China during the economic transition period? There are two hypotheses proposed to answer this: the disguised unemployment hypothesis that there is no opportunity to access the formal sector to gain better work, and the business creation hypothesis that successful business owners create new jobs for others, new business opportunities, and many innovative new products for society, as pointed out in previous studies. Using CHIP2007 and CHIP2013, this paper tests the two hypotheses. The main conclusions are as follows: First, generally, utilizing the imputed wage premiums, which were used in previous studies, the business creation hypothesis is rejected; the disguised unemployment hypothesis is supported for both the local urban resident and the migrant groups in 2007 and 2013. Second, the results that utilized the new wage premiums based on the imputed employee wages in the private sector show that the business creation hypothesis is supported when a worker chose to become an employer for both the migrant group and the local urban resident group in 2013. Third, the business creation hypothesis is relevant for the older generation group of local urban residents in 2013.