Understanding the Kuznets Process: An Empirical Investigation of Income Inequality in China 1978-2011

Wenli Cheng, Yongzheng Wu, Cema Cema and College of Mathematics and Computer Science, Hunan Normal University College of Mathematics and Computer Science, Hunan Normal University

No 12-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper investigates income inequality in the post-reform Chinese economy of 1978 to 2011. We identify a Kuznets inverted-U relationship between economic development and overall income inequality and provide evidence to suggest that this relationship was driven by the process of urbanization. We demonstrate that, after controlling for urbanization, low productivity in agriculture relative to that of the economy as a whole (dualism) was a significant contributing factor to income inequality. Inflation and the expansion of higher education are also found to have had an effect of widening inequality, but the effect of education does not appear to be robust.

Keywords: Kuznets curve; income inequality in China; Theil index; urbanisation; dualism (search for similar items in EconPapers)
JEL-codes: O15 O53 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-04
New Economics Papers: this item is included in nep-his and nep-tra
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Citations: View citations in EconPapers (1)

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Journal Article: Understanding the Kuznets Process—An Empirical Investigation of Income Inequality in China: 1978–2011 (2017)
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