IDEAS home Printed from https://ideas.repec.org/a/bla/ecinqu/v57y2019i2p997-1015.html
   My bibliography  Save this article

Accounting For Urban China'S Rising Income Inequality: The Roles Of Labor Market, Human Capital, And Marriage Market Factors

Author

Listed:
  • Shuaizhang Feng
  • Gaojie Tang

Abstract

This paper analyzes China's rising family income inequality since the early 1990s when the urban labor market started its transformation from a centrally controlled to a market‐driven one. We document the trends in income inequality over the period of 1992–2009 using the Urban Household Survey data, and adopt the approach recently proposed by Eika et al. (2014) to decompose changes in income inequality. We find that labor market factors accounted for about three‐quarters of the overall increases in income inequality while falling marriage rate contributed the other quarter. Changes in human capital levels and marital assortativeness have not contributed to the rising inequality. (JEL D31, I26, J12)

Suggested Citation

  • Shuaizhang Feng & Gaojie Tang, 2019. "Accounting For Urban China'S Rising Income Inequality: The Roles Of Labor Market, Human Capital, And Marriage Market Factors," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 997-1015, April.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:2:p:997-1015
    DOI: 10.1111/ecin.12748
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecin.12748
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecin.12748?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jeremy Greenwood & Nezih Guner & Georgi Kocharkov & Cezar Santos, 2014. "Marry Your Like: Assortative Mating and Income Inequality," American Economic Review, American Economic Association, vol. 104(5), pages 348-353, May.
    2. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    3. Mark Rosenzweig & Junsen Zhang, 2014. "Co-residence, Life-Cycle Savings and Inter- Generational Support in Urban China," Working Papers 1039, Economic Growth Center, Yale University.
    4. Suqin Ge & Dennis Tao Yang, 2014. "Changes In China'S Wage Structure," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 300-336, April.
    5. Rania Gihleb & Kevin Lang, 2020. "Educational Homogamy and Assortative Mating Have Not Increased," Research in Labor Economics, in: Change at Home, in the Labor Market, and On the Job, volume 48, pages 1-26, Emerald Group Publishing Limited.
    6. Feng, Shuaizhang & Hu, Yingyao & Moffitt, Robert, 2017. "Long run trends in unemployment and labor force participation in urban China," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 304-324.
    7. Meng, Xin & Shen, Kailing & Xue, Sen, 2013. "Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 227-244.
    8. Xin Meng, 2012. "Labor Market Outcomes and Reforms in China," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 75-102, Fall.
    9. Lasse Eika & Magne Mogstad & Basit Zafar, 2019. "Educational Assortative Mating and Household Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2795-2835.
    10. Chi, Wei & Li, Bo & Yu, Qiumei, 2011. "Decomposition of the increase in earnings inequality in urban China: A distributional approach," China Economic Review, Elsevier, vol. 22(3), pages 299-312, September.
    11. Liu, Zhiqiang, 2007. "The external returns to education: Evidence from Chinese cities," Journal of Urban Economics, Elsevier, vol. 61(3), pages 542-564, May.
    12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    13. Richard Breen & Signe Andersen, 2012. "Educational Assortative Mating and Income Inequality in Denmark," Demography, Springer;Population Association of America (PAA), vol. 49(3), pages 867-887, August.
    14. repec:wyi:journl:002165 is not listed on IDEAS
    15. Li, Hongbin & Liu, Pak Wai & Zhang, Junsen, 2012. "Estimating returns to education using twins in urban China," Journal of Development Economics, Elsevier, vol. 97(2), pages 494-504.
    16. Hongbin Li & Prashant Loyalka & Scott Rozelle & Binzhen Wu, 2017. "Human Capital and China's Future Growth," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 25-48, Winter.
    17. Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
    18. Hongyun Han, 2010. "Trends in educational assortative marriage in China from 1970 to 2000," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(24), pages 733-770.
    19. Haiyan Ding & Hui He, 2018. "A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986-2009," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 106-137, July.
    20. Xing, Chunbing & Li, Shi, 2012. "Residual wage inequality in urban China, 1995–2007," China Economic Review, Elsevier, vol. 23(2), pages 205-222.
    21. Junsen Zhang & Jun Han & Pak-Wai Liu & Yaohui Zhao, 2008. "Trends in the Gender Earnings Differential in Urban China, 1988–2004," ILR Review, Cornell University, ILR School, vol. 61(2), pages 224-243, January.
    22. Xin Meng, 2004. "Economic Restructuring and Income Inequality in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 357-379, September.
    23. Li, Shi & Whalley, John & Xing, Chunbing, 2014. "China's higher education expansion and unemployment of college graduates," China Economic Review, Elsevier, vol. 30(C), pages 567-582.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sergio Firpo & Lorena Hakak, 2022. "Changes in the women’s labor market and education and their impacts on marriage and inequality: evidence from Brazil," Empirical Economics, Springer, vol. 62(4), pages 1909-1950, April.
    2. Yu, Mingzhe & Deng, Xin, 2021. "The Inheritance of Marketization Level and Regional Human Capital Accumulation: Evidence from China," Finance Research Letters, Elsevier, vol. 43(C).
    3. Chen, Jiwei & Guo, Jiangying, 2022. "The effect of female education on fertility: Evidence from China’s compulsory schooling reform," Economics of Education Review, Elsevier, vol. 88(C).
    4. Yidan Liang, 2023. "Capital and labour distortion in China: a systematic literature review using HistCite," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 1759-1784, June.
    5. Liu, De-chih, 2021. "The Unemployment Invariance Hypothesis: Does the Gender Matter?," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 62(2), pages 178-199, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qu, Zhaopeng & Zhao, Zhong, 2017. "Glass ceiling effect in urban China: Wage inequality of rural-urban migrants during 2002–2007," China Economic Review, Elsevier, vol. 42(C), pages 118-144.
    2. Gustafsson, Björn & Wan, Haiyuan, 2020. "Wage growth and inequality in urban China: 1988–2013," China Economic Review, Elsevier, vol. 62(C).
    3. Nie, Haifeng & Xing, Chunbing, 2019. "Education expansion, assortative marriage, and income inequality in China," China Economic Review, Elsevier, vol. 55(C), pages 37-51.
    4. Björn Gustafsson & Haiyuan Wan, 2018. "Wage growth and inequality in urban China: 1988–2013," WIDER Working Paper Series 163, World Institute for Development Economic Research (UNU-WIDER).
    5. Shuaizhang Feng & Yingyao Hu & Robert Moffitt, 2015. "Long Run Trends in Unemployment and Labor Force Participation in China," NBER Working Papers 21460, National Bureau of Economic Research, Inc.
    6. Omoniyi B. Alimi & David C. Maré & Jacques Poot, 2022. "Who partners up? Homogamy and income inequality in New Zealand cities," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 171-193, January.
    7. Feng, Shuaizhang & Hu, Yingyao & Moffitt, Robert, 2017. "Long run trends in unemployment and labor force participation in urban China," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 304-324.
    8. Björn Gustafsson & Haiyuan Wan, 2018. "Wage growth and inequality in urban China: 1988-2013," WIDER Working Paper Series wp-2018-163, World Institute for Development Economic Research (UNU-WIDER).
    9. Qiao Wen, 2022. "Trends in College–High School Wage Differentials in China: The Role of Cohort-Specific Labor Supply Shift," Sustainability, MDPI, vol. 14(24), pages 1-23, December.
    10. Qu, Zhaopeng (Frank) & Zhao, Zhong, 2008. "Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition," IZA Discussion Papers 3659, Institute of Labor Economics (IZA).
    11. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    12. Meng, Xin & Shen, Kailing & Xue, Sen, 2013. "Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 227-244.
    13. Hau, Harald & Dautović, Ernest & Huang, Yi, 2017. "The Consumption Response to Minimum Wages: Evidence from Chinese Households," CEPR Discussion Papers 12057, C.E.P.R. Discussion Papers.
    14. Hare, Denise, 2016. "What accounts for the decline in labor force participation among married women in urban China, 1991–2011?," China Economic Review, Elsevier, vol. 38(C), pages 251-266.
    15. Zhong Zhao & Zhaopeng Qu, 2013. "Wage Inequality of Chinese Rural-Urban Migrants Between 2002 and 2007," Working Papers PMMA 2013-04, PEP-PMMA.
    16. Frederik Almar & Benjamin Friedrich & Ana Reynoso & Bastian Schulz & Rune Vejlin, 2023. "Marital Sorting and Inequality: How Educational Categorization Matters," CESifo Working Paper Series 10265, CESifo.
    17. Ge, Peng & Sun, Wenkai & Zhao, Zhong, 2021. "Employment structure in China from 1990 to 2015," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 168-190.
    18. Iva Valentinova Tasseva, 2021. "The Changing Education Distribution and Income Inequality in Great Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(3), pages 659-683, September.
    19. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    20. Barban, Nicola & De Cao, Elisabetta & Oreffice, Sonia & Quintana-Domeque, Climent, 2021. "The effect of education on spousal education: A genetic approach," Labour Economics, Elsevier, vol. 71(C).

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecinqu:v:57:y:2019:i:2:p:997-1015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.