Convergence of Inequality Dimensions in China: Income, Consumption, and Wealth from 1988 to 2018

Haiyuan Wan (), Björn Anders Gustafsson () and Yingfei Wang ()
Additional contact information
Haiyuan Wan: Beijing Normal University
Björn Anders Gustafsson: Göteborg University
Yingfei Wang: Peking University

No 16719, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using household data from 1988 to 2018, we confirm that the increase in income inequality in China has come to a halt in recent years but show that inequality in wealth and consumption continues to increase. We report a clear convergence of inequality across the different dimensions of income, consumption, and wealth. Households at the top of one dimension are increasingly located at the top of the other two dimensions. The mechanisms for such convergence across dimensions are analysed, and the savings rate links income and consumption, while capital accumulation is the central mechanism linking income and wealth. In addition, the wealth and income structure contribute to intensifying the convergence trend. We argue that the relatively high level of inequality in China may continue since income, consumption and wealth are increasingly reinforcing each other.

Keywords: convergence mechanism; return rate of capital; property income; savings rate; economic inequality (search for similar items in EconPapers)
JEL-codes: D31 I31 P52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2024-01
New Economics Papers: this item is included in nep-cna
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Review of Income and Wealth , 2024, 70 (4), 1089-1115

Downloads: (external link)
https://docs.iza.org/dp16719.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16719

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().