Changes in the causes of earnings inequality in urban China from 1988 to 2002

Asuyama Yoko

No 176, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper analyzes the causes of earnings inequality in urban China from 1988 to 2002. Earnings inequality in urban China continuously increased, even when adjusting for regional price differences. This paper reveals how the causes of earnings inequality changed between the periods 1988-1995 and 1995-2002 by reflecting labor-related institutional reform in China. Contrary to the situation from 1988 to 1995, between 1995 and 2002, employment status became the largest disequalizer, and the decline of inter-provincial inequality contributed to a reduction in entire earnings inequality. Individual ability, represented by education and occupation, received much greater rewards. Throughout the period from 1988 to 2002, a large part of the explained inequality increase was due to change in price (valuation of each individual's attributes) and not due to change in quantity (composition of individual attributes).

Keywords: China; Income distribution; Labor market; Earnings inequality; Inequality decomposition; 中国; 所得分配; 労働市場; 所得格差; 不平等度の分解; 格差尺度の分解 (search for similar items in EconPapers)
JEL-codes: D31 J31 (search for similar items in EconPapers)
Date: 2008-10-01
New Economics Papers: this item is included in nep-cna, nep-dev, nep-lab and nep-tra
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 176. 2008-10-01

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