The evolution of income and wealth inequality in China

Yan Wang and Juan Carlos Conesa

Journal of Economic Dynamics and Control, 2025, vol. 179, issue C

Abstract: Income and wealth inequality has increased substantially in China in the last decades. We propose a multi-sector model with rich heterogeneity to quantify the impact on inequality of key changes that started in the early 1990s. We find that rural-urban migration has alleviated the increase in income inequality by limiting the increase in the rural-urban income gap, and that the emergence and growth of the private sector is the key driving force behind the increase in wealth inequality. Our quantitative exercise suggests that pretax income concentration will continue to increase until the 2050s, while wealth concentration has already peaked.

Keywords: China; Inequality; Structural transformation; Entrepreneurship (search for similar items in EconPapers)
JEL-codes: D31 E20 J11 O43 P23 P25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:179:y:2025:i:c:s0165188925001332

DOI: 10.1016/j.jedc.2025.105167

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