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Inequality of Opportunity in Household Income, China 2002-2018

Xiuna Yang (), Björn Anders Gustafsson () and Terry Sicular ()
Additional contact information
Xiuna Yang: China Development Research Foundation
Björn Anders Gustafsson: University of Gothenburg

No 14463, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study contributes to the literature on inequality of opportunity (IOp) in China by covering a longer and more recent span of time, employing better measures of given characteristics, and analyzing IOp for household income per capita with comparisons to individual income. Furthermore, we study how IOp differs between the rural- and urban-born, and how IOp changes across birth cohorts and with age. We use 2002, 2013 and 2018 data from the Chinese Household Income Study and focus on income inequality among working-age persons. Between the years of study, IOp in China declined, especially between 2013 and 2018. In 2002 the large contributors to IOp were region, hukou type at birth, and parents' characteristics. In 2018 the contributions of region, hukou type at birth and parents' occupation had decreased, but that of parents' education had increased. We find that IOp is larger among those born in rural than urban China. Furthermore, IOP's contribution to total inequality within each birth cohort is highest earlier in individuals' work lives and declines with age. IOp is higher for older than younger birth cohorts, reflecting that younger cohorts have benefited from increased opportunities associated with China's reforms and opening up.

Keywords: inequality of opportunity; income inequality; Gini; China (search for similar items in EconPapers)
JEL-codes: D31 D63 J62 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021-06
New Economics Papers: this item is included in nep-cna, nep-lab and nep-ltv
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Published - published in: China Economic Review, 2021, Article 101 684

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