Why Are Household Incomes More Unequally Distributed in China than in Russia?

Björn Anders Gustafsson (), Shi Li () and Ludmila Nivorozhkina ()
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Björn Anders Gustafsson: Göteborg University
Ludmila Nivorozhkina: Rostov State Economic University

No 5383, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Harmonised microdata show a Gini coefficient for per capita total income of 45.3 percent in China 2002 and 33.6 percent in Russia 2003. A much larger urban to rural income gap in combination with a much smaller proportion of people living in urban areas in China are important reasons for this cross-country difference in inequality. Wage is a more non-equalising income source in China than in Russia. While Russian public transfers reduce income inequality, Chinese public transfers increase income inequality. Cross-country differences in the process of transition are also found to be significant. A relatively large non-agriculture self-employment sector is non-equalising in rural China, but is also narrowing the urban to rural income gap. In contrast to the many cross-country differences revealed, we report income inequality among urban residents in China and in urban Russia to be very similar.

Keywords: inequality; China; public transfers; income distribution; Russia (search for similar items in EconPapers)
JEL-codes: D31 P25 P52 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2010-12
New Economics Papers: this item is included in nep-cis, nep-cna, nep-lab, nep-ltv and nep-tra
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Published - published in: Cambridge Journal of Economics, 2011, 35 (5), 897-920

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Journal Article: Why are household incomes more unequally distributed in China than in Russia? (2011)
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