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Fleshing out the olive? Observations on income polarization in China since 1981

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  • Ravallion, Martin
  • Chen, Shaohua

Abstract

In a rare example of a national goal for income distribution besides reducing poverty (for which there is a broad consensus), China's leadership committed in 2021 to attaining a less polarized “olive-shaped” distribution. The paper argues that the Foster-Wolfson polarization curve and index are well suited to quantifying this goal. New estimates indicate that polarization has been on a rising trend since 1981, but with a de-polarizing reversal emerging around 2009. There is no robust time-series evidence of polarizing effects of economic growth, poverty reduction or population urbanization. Larger urban-rural gaps in mean incomes have been strongly polarizing.

Suggested Citation

  • Ravallion, Martin & Chen, Shaohua, 2022. "Fleshing out the olive? Observations on income polarization in China since 1981," China Economic Review, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:chieco:v:76:y:2022:i:c:s1043951x22001298
    DOI: 10.1016/j.chieco.2022.101871
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    More about this item

    Keywords

    China; Polarization; Inequality; Growth;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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