Regional Income Inequality and Welfare in China: A Dominance Analysis

Inference-based dominance analysis is applied to micro data containing comprehensive measures of rural and urban incomes in seven major regions of China. Ordinal inequality rankings are estimated for Lorenz curves of household income, per capita household income and square root equivalences scale adjusted income. Regional inequality is shown to be sensitive to the treatment of household size. The lack of reliable regional cost of living measures leads us to propose that entire food expenditure share quantile distributions be used as indicators of differences in well-being within and across regions. The results indicate that statistical rankings of Lorenz dominance and food share dominance are very different indicators of regional disparities in income and welfare in China. One urban region is shown to have been in the unenviable position in 1988 of being at the bottom of the Lorenz dominance ranking and tied for last in terms of food share dominance.     

An Exponential Family of Lorenz Curves

A new method for building parametric-functional families of Lorenz curves, generated from an initial Lorenz curve (which satisfies some regularity conditions), is presented. The method is applied to the exponential family since they use the exponential Lorenz curves as their generating curves. Several properties of these families are analyzed, including the population function, inequality measures, and Lorenz orderings. Finally, an application is presented for data from various countries. The family is shown to perform well in fitting the data across countries. The results are very robust across data sources.     

Migration,population aging,and income inequality in China

In this study, we examine the effects of four demographic factors, namely, birth, death, natural aging, and net migration, on population aging and income inequality in China. We use the official Chinese data and the China Household Income Project Survey data for the 2007–2013 period and apply a decomposition model based on the Shapley method. Unlike previous studies, we include migration in our decomposition model and find that natural aging is the primary factor contributing to population aging in both urban and rural areas. Further, migration may accelerate population aging in rural areas. Moreover, migration contributes to reducing income inequality in urban areas, while widening income inequality in rural areas. The effect of migration is larger than those of birth, death, and natural aging on income inequality. The robustness checks confirm these conclusions.     

人口老龄化对城乡收入不平等的影响效应研究——基于中国二元经济结构演变的视角

理论分析表明,二元经济结构下人口老龄化能够通过要素禀赋结构调整和社会福利改善对城乡居民收入产生不同的收入效应和替代效应,进而影响城乡收入不平等。利用中国2000-2014年省际面板数据进行实证检验发现：中国人口老龄化显著的扩大了城乡收入不平等,但要素禀赋结构和社会福利水平对老龄化条件下的城乡收入不平等影响效应不同;随着对老年人口供养负担的加重,社会福利支出对老龄化条件下的城乡收入不平等主要表现为替代效应,城市偏向的社会福利支出使得农村因照料老人引起的劳动力供给减少扩大了城乡收入不平等;而要素禀赋结构的转变则使得老龄化主要表现为收入效应,劳动力相对资本的稀缺性导致转移劳动力工资上涨,从而缩小了城乡收入不平等;随着老龄化深化,通过社会福利改善和要素禀赋结构调整能够有效抵消老龄化对城乡收入不平等的负面影响;研究也证实了二元经济结构的优化和农业规模化经营对城乡收入不平等的缩小作用,而失业率上升和城乡投资差距却会加剧城乡收入不平等。     

我国居民收入基尼系数的估计及城乡阶层效应——基于城镇、农村收入20分组数据的研究

基于2013年调整的城镇、农村居民20分组收入数据,文章再估计了我国2005-2012年的城镇、农村及城乡混合的基尼系数,结果表明,我国总体基尼系数由2005年的0.4563下降到2012年的0.4293,城镇基尼系数有下降趋势,农村基尼系数较稳定;比较研究发现,以往基于未调整的农村分组数据的基尼系数估计会由于缺少大量高收入群体信息而高估了农村基尼系数,从而高估了总体基尼系数。而且,基于Yitzhaki（1994）的城乡分解框架,我们发现,城乡内部差距比城乡间差距对总体差距的贡献更大;城镇收入分布的阶层效应比农村的更强,即城镇群体更加趋向于形成一个阶层,而且我国的城乡阶层效应越来越明显。     

Rural-urban Migration and Dynamics of Income Distribution in China： A Non-parametric Approach

Extending the income dynamics approach in Quah (2003), the present paper studies the enlarging income inequality in China over the past three decades from the viewpoint of rural–urban migration and economic transition. We establish non‐parametric estimations of rural and urban income distribution functions in China, and aggregate a population‐weighted, nationwide income distribution function taking into account rural–urban differences in technological progress and price indexes. We calculate 12 inequality indexes through non‐parametric estimation to overcome the biases in existing parametric estimation and, therefore, provide more accurate measurement of income inequality. Policy implications have been drawn based on our research.     

Inequality and the Urban-rural Divide in China： Effects of Regressive Taxation

Using three comparable national representative household surveys for China in 1988, 1995 and 2002, the present paper reveals the regressivity and urban bias of China＇s direct tax and welfare system in this period It shows that a regressive taxation system and skewed allocation of subsidies increases the urban-rural income gap and enhances overall inequality. Modeling these relationships indicates that the relatively poorer rural population has a net tax liability, whereas those in the richer urban areas receive net subsidies. This pattern is common in China, although the extent of the bias varies. This skewed system of tax and welfare payments is a major cause of the persisting urban-rural income gap and contributes to the overall income inequality in China. The abolishment of the agriculture tax in 2006 has had a positive impact on rural people ＇s livelihoods.     

A decomposition analysis of income inequality of Chinese rural households

This paper reports an application of household survey data collected from grain producing areas in five provinces of China to issues of the determinants of rural inequality. Previous studies suggest that non-agricultural activities have been the major cause of rural income inequality, which has important implications for policy formulation. However, our results show that inequality within the grain producing areas was also very high, with differences in crop income as the major source of inequality. The policy implications are also different from those of previous studies. While some suggest that an increase in agricultural income can reduce inequality, our results indicate that this is not universally true. In some cases, whether the increase in crop income has come from state procurement also matters. These results call for a more cautious and area-specific approach to policy formulation as far as inequality is concerned.     

Land, Factor Markets, and Inequality in Rural China: Historical Evidence

Drawing on a unique household-level data set from northeast China in the 1930s, this paper explores the connections between the distribution of land, factor markets, and income distribution. We test whether patterns of income inequality were consistent with the predictions of a market-clearing, neoclassical model linking land and labor endowments, through factor markets to household income. While the model is consistent with some features in the data, we reject the hypothesis that factor markets worked perfectly and find support for the historian's intuition regarding the disproportionate impact of land inequality in the countryside. Nevertheless, where markets were more active, especially land rental markets, excess returns to land were diminished and inequality was lowest. This suggests that factor market development played a positive role in reducing inequality in rural China.     

中国农村收入不平等—基于微观调查数据的回归分解

论文利用2003-2008年CGSS的微观个体调查数据,运用回归分解方法对中国农村收入不平等进行分解。首先对收入不平等进行测算,研究发现农村收入极端不平等,并且呈上升趋势。回归分解结果表明,年龄、教育、性别、东部地区虚拟变量、政治地位、婚姻、健康和幸福感是对农村收入不平等的决定要素。其中教育、年龄、性别、东部地区虚拟变量和健康对农村收入不平等的贡献显著。其余变量对农村收入不平等的贡献相对较小,但其对农村收入不平等的影响也不能被忽视。研究结论对政府制定科学合理的收入分配政策和有效调控收入差距具有借鉴作用。     

Spatial inequality in education and health care in China

While increasing income inequality in China has been commented on and studied extensively, relatively little analysis is available on inequality in other dimensions of human development. Using data from different sources, this paper presents some basic facts on the evolution of spatial inequalities in education and healthcare in China over the long run. In the era of economic reforms, as the foundations of education and healthcare provision have changed, so has the distribution of illiteracy and infant mortality. Across provinces and within provinces, between rural and urban areas and within rural and urban areas, social inequalities have increased substantially since the reforms began.     

西部少数民族地区农村收入不平等分析——基于云南红河州农村住户数据

本文基于云南红河州农户调查数据,采用多层统计分析方法对西部少数民族地区农村收入不平等进行分析。研究发现,收入不平等不仅存在于乡镇之间,还存在内部家庭之间;地理地势是影响农户在乡镇之间收入差异的重要因素,而土地、种植结构、资本投入、教育、工资比重、负担率、培训、非农产业参与率反映了农户之间的个体差异。研究结果表明,发展区域特色经济、实现农业产业化经营是减少收入不平等的重要途径。     

The long-term evolution of national income inequality and rural poverty in China

Using the five waves of the China Household Income Project surveys conducted during 1988–2013, we investigate long-term changes in national income inequality and rural poverty in China. National income inequality rose markedly to 2007 and thereafter fell slightly. Income growth was widely shared, but inequality increased because the high-income percentiles had faster income growth than lower percentiles and because the gap between urban and rural household incomes widened. The fall in income inequality after 2007 reflects faster income growth among low-income percentiles and the impacts of newly introduced redistributive policies. The paper also finds a considerable, ongoing poverty reduction in rural China. A poverty decomposition analysis indicates that this rural poverty reduction was mostly due to income growth rather than redistribution.     

How Can Chinese Farmers' Property Income Be Improved? A Population–Land Coupling Urbanization Mechanism

Balancing urban and rural development is an important political goal in China. The failure of rural land privatization has led to a low level of rural economic development and a vast property income gap between citizens and farmers. This paper illustrates the reasons for property income inequality from the perspective of the land tenure system and the dualistic household registration system. After evaluating the segmentation of the rural land market and the rigid nature of rural land assets, a population–land coupling urbanization mechanism is proposed. The paper argues that China's land property system has externalized a high degree of geospatial and social urban and rural intertwinement. Major reform of the rural land property rights system is required to correct the situation (further development of the social security system and stable urbanization) and to increase property income potential for farmers.     

居民家庭代际收入的影响因素分析及差异性分析 ——基于代际传递视角

基于中国家庭追踪调查（CFPS）数据,使用Shapely方法探究人力资本、社会资本、财富资本及自然禀赋各因素对居民收入差距的影响程度,在此基础上将样本按照城乡及地区类别进行分组,探讨城乡及地区视角下的各因素对居民收入传递的差异性表现。结果显示,农村居民的社会资本解释程度要大于其对城镇居民样本的解释程度,城镇居民样本自然禀赋的解释程度高于农村居民样本。     

A causal model of the size distribution of family income: Some overlooked determinants and policy implications

Summary The causes and interaction of variables affecting income inequality are complex and very little empirical research has been attempted to explain or measure these interactions. This paper employs an eclectic approach to construct a causal multiequation model that specifies a system of interrelationships to examine both the direct and indirect effects which selected socioeconomic and demographic variables have upon the size distribution of family income. This procedure has advantages over single equation models in explaining the processes through which variables affect income inequality, allowing greater accuracy in estimating the impact that variables have upon inequality by measuring both their direct and indirect effects, and facilitating the identification of policy variables and how they may be expected to work through the system of interrelationships to narrow the differentials in family earnings.In particular, our model reveals that the birth rate is the single most important factor exacerbating family income inequality, and selective policies were identified which may interact with many variables within the system to reduce family income inequality. The model further demonstrates a high predictive power with a coefficient of determination of 0.82. Our results demonstrate that causal multiequation models using an eclectic methodology to examine the interactions of variables and processes through which they affect the size distribution of income can be useful in quantifying the relative effects of a wide variety of socioeconomic and demographic determinants and constructing policies in future research efforts in this important area.     

Asymptotically distribution-free statistical test for generalized lorenz curves: An alternative approach

A generalized Lorenz (GL) curve differs from a Lorenz curve in that the former is a rescaled version of the latter. A GL curve represents the relationship between the average income computed from a cumulative percentage of the population and the corresponding cumulative percentage. GL dominance is a useful criterion for ranking GL curves either for an economy over time or for a number of economies at one point in time. Relative to a dominated GL curve, a dominating GL curve indicates both that total income for the population is higher and that it is more equally distributed. Hence, it is obviously more desirable in a certain social sense. While sound statistical tests are essential for making statistical inference about GL dominance from sample GL curve estimates, the lack of a suitable joint test procedure for GL dominance is an unsolved problem in income distribution literature. This paper aims at solving this problem and provides an illustrative empirical example to show how to apply this test procedure in empirical research.     

Decomposing Income Inequality and Policy Implications in Rural China

Using village data from samples covering 6 provinces,36 counties and 216 townships,the income inequalities within and between townships in rural China are assessed. The Theil index and the mean logarithmic deviation methods enable us to test income inequality at the township level,and to decompose it into intra-regional and inter-regional at county and provincial levels. In the present paper,we also decompose income inequalities between and within the nationally designated poor counties (NDPC). The results show that approximately two-thirds of the income inequality in rural China would be eliminated if measures and policies were targeted at the county level. This study also confirms the rationale that China's poverty alleviation strategy of focusing on poor counties based on the inequalities between NDPC and non-NDPC accounts for the most inter-province inequality.     

Income inequality,volatility, and mobility risk in China and the US

A unified index of income inequality, volatility, and mobility risk is presented, and measurements based on US and Chinese panel data calculated. China is found to have higher-income volatility than the US in recent data, so that long-run inequality is comparable in the two countries, and short-run inequality overstates long-run inequality more in China than in the US. In both countries volatility and income inequality are increasing over time.     

The Kuznets curve: Evidence from Prussia revisited

Conclusions To avoid confusion arising from mixing up methods, the methodological arsenal was restricted to the computation of percentiles as this was the favoured device in the Kuznets-paper. But with an increasing population the interpretation of rising percentiles is by no means straightforward (which is equally true with other measures of inequality). When the number of income-receiving units and their mean income are held constant, rising shares of the top-income receivers can be interpreted in terms of “rich people getting richer and poor people getting poorer”. But when both, the number of units and their mean income are rising, the interpretation of rising percentiles is quite a problem. For example, aggregating two populations with all percentiles alike (i.e. identical Lorenz curves) but different mean incomes would result in a greater population with increased shares of the top-income receivers and lessened shares of the low-income receivers (i.e. a Lorenz curve more close to the boundaries of the rectangle). It is obvious from this example that the welfare implications of increasing percentiles cannot be separated from the welfare implications of rising mean incomes. Especially, with rising populations and rising mean incomes the income shares of the top-income receivers may very well increase without any poor man getting poorer, so that not even Rawls [1971] would necessarily object to such a development. Bearing these limitations in mind, the outcomes of the previous sections may be summarized in confirming Kuznets’ surmise that income inequality in Prussia increased within the second half of the last century. Furthermore, it is emphasized that the peak was most probably reached around the turn of the century with the First World War merely fortifying the equalizing tendencies which originated from the economic development process itself.