Measurement and Decomposition Analysis of Occupational Income Inequality in China

Jing Yuan, Teng Ma, Yinghui Wang and Zongwu Cai ()
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Jing Yuan: Department of Statistics, Shandong Technology and Business University, Yantai 264005, China
Teng Ma: Penglai Sub-Branch, Industrial and Commercial Bank of China Limited Company, Yantai 264005, China
Yinghui Wang: Department of Statistics, Shandong Technology and Business University, Yantai 264005, China
Zongwu Cai: Department of Economics, University of Kansas, Lawrence, KS 66045, USA

Stats, 2025, vol. 8, issue 1, 1-26

Abstract: Using the China CFPS database, this paper measures the degree of intra-occupational inequality in China with the Pareto coefficient and uses the generalized entropy index to decompose the top income gap by region as well as by industry. The empirical results show that, firstly, the degree of income inequality between occupations in China has increased significantly in recent years. The provinces with a higher degree of income inequality between occupations are mostly located in the more economically developed regions in the central and eastern parts of the country, while the degree of inequality between occupations in the western part is lower. Secondly, the highest-income occupations are mainly in the manufacturing industry, with relatively high levels in the construction industry, the education sector, the wholesale and retail trade, and public administration and social organizations, while the levels in other occupations are relatively low. Lastly, the top income gap primarily originates from within industries. However, the contribution rate of the top income gap between industries is gradually increasing, while the contribution rate of the top income gap within industries is gradually decreasing.

Keywords: occupational income inequality; Pareto coefficient; generalized entropy index (search for similar items in EconPapers)
JEL-codes: C1 C10 C11 C14 C15 C16 (search for similar items in EconPapers)
Date: 2025
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