INCOME INEQUALITY IN THE PEOPLE'S REPUBLIC OF CHINA: TRENDS, DETERMINANTS, AND PROPOSED REMEDIES

Iris Claus, Les Oxley, Chen Wang (), Guanghua Wan and Dan Yang

Journal of Economic Surveys, 2014, vol. 28, issue 4, 686-708

Abstract: The issue of income inequality in the People's Republic of China (PRC) has attracted world-wide attention, leading to a sizable literature. This paper attempts to provide a nonexhaustive literature review of the PRC's inequality trends and determinants, and suggested government interventions. It discusses profiles of income inequality along three dimensions: interhousehold disparity, regional divides, and urban–rural gaps. This is followed by an exploration of the driving forces behind rising inequality, including the notorious hukou system, policy biases, location or geographic factors, globalization, and education. Finally, the paper summarizes and proposes government interventions for containing or reducing income inequality in the PRC. Important areas for future research are also suggested in the final section of the paper.

Date: 2014
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