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How does informal employment impact income inequality?

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  • Hong Zuo

Abstract

This study investigates how informal employment impacts total income inequality in urban China. Finite mixture methodology is employed to examine the segments that exist in the informal labour market, and the Theil index (T0) is used to break down total income inequality according to different subsamples. We found that the two-segment model (upper-tier and lower-tier) best describes the structure of the informal labour market in urban China and that the upper-tier segment contributes most to the total income inequality.

Suggested Citation

  • Hong Zuo, 2016. "How does informal employment impact income inequality?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(15), pages 1117-1120, October.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:15:p:1117-1120
    DOI: 10.1080/13504851.2016.1142644
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    References listed on IDEAS

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    1. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    2. Conway, Karen Smith & Deb, Partha, 2005. "Is prenatal care really ineffective? Or, is the 'devil' in the distribution?," Journal of Health Economics, Elsevier, vol. 24(3), pages 489-513, May.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    Cited by:

    1. Lourenco S. Paz, 2021. "How does import competition impact job type?," Economics Bulletin, AccessEcon, vol. 41(3), pages 2063-2020.
    2. Guangyan Chen & Feng Qiu & Xiaowen Dai & Hongxing Lan & Jiahao Song, 2022. "Research on the Influence of Informal Employment on Residents’ Happiness in China: Empirical Analysis Based on CLDS Data," IJERPH, MDPI, vol. 19(15), pages 1-14, July.

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