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How does the Economic Reform Exert Influence on Inequality in Urban China?

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  • Shinichiro Okushima
  • Hiroko Uchimura

Abstract

This paper reports the results of an analysis of changes in income inequality, and in its determinants, in urban China since the economic reforms that began in 1978. The intention is to identify new characteristics of economic inequality. It first shows that income differentials across and in provinces widened and that their economic rankings were becoming fixed during the period from 1988 to 1995. Second, age was the major factor in inequality in 1988, while education became the important factor in 1995. Third, education significantly contributed to increasing inequality during the period. Fourth, the higher education-level groups had less within-group inequality. These changes reflect the penetration of the market mechanism into China after the reforms. However, this will be problematic without equality of opportunity.

Suggested Citation

  • Shinichiro Okushima & Hiroko Uchimura, 2005. "How does the Economic Reform Exert Influence on Inequality in Urban China?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 11(1), pages 35-58.
    • Handle: RePEc:taf:rjapxx:v:11:y:2005:i:1:p:35-58
    DOI: 10.1080/13547860500347711
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    1. Zhang, Xiaobo & Kanbur, Ravi, 2005. "Spatial inequality in education and health care in China," China Economic Review, Elsevier, vol. 16(2), pages 189-204.
    2. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    3. Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494.
    4. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
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