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Does population aging intensify income inequality? Evidence from China

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  • Zhiqiang Dong
  • Canqing Tang
  • Xiahai Wei

Abstract

Change in the population age structure affects the income inequality of an economy because income inequality often differs in different age groups. This paper proposes a theoretical framework to investigate the condition under which income inequality increases with demographic change and then proves that this condition is satisfied in China based on theory and empirical evidence. Accordingly, a hypothesis was developed, postulating that aging intensifies income inequality. We adopted the Gini coefficient as the measure of income inequality in an empirical study to test the hypothesis by using provincial panel data of China from 1996 to 2011. We determined that aging (represented by an increase in the elderly dependency ratio and decrease in the children's dependency ratio) increases income inequality significantly in current China. This finding suggests that the effect of aging on inequality be considered because it may have different policy implications.

Suggested Citation

  • Zhiqiang Dong & Canqing Tang & Xiahai Wei, 2018. "Does population aging intensify income inequality? Evidence from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(1), pages 66-77, January.
    • Handle: RePEc:taf:rjapxx:v:23:y:2018:i:1:p:66-77
    DOI: 10.1080/13547860.2017.1354270
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    Cited by:

    1. Chu, Yihe & Li, Yujia & Che, Ming, 2024. "Population aging and the dynamics of the skill income gap: An analysis of a multiple mediation effect," Finance Research Letters, Elsevier, vol. 62(PB).
    2. Zhan, Peng & Ma, Xinxin & Li, Shi, 2021. "Migration, population aging, and income inequality in China," Journal of Asian Economics, Elsevier, vol. 76(C).
    3. Keneck-Massil, Joseph & Nomo-Beyala, Clery & Owoundi, Ferdinand, 2021. "The corruption and income inequality puzzle: Does political power distribution matter?," Economic Modelling, Elsevier, vol. 103(C).
    4. Yonghe Xiao & Jingxuan Li, 2022. "RETRACTED ARTICLE: A conversational analysis of aging in China from a cross-section of the labour market: a corpus-based study," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-7, December.
    5. Hanrui Jia & Peng Zhan, 2021. "Intra‐family Income Redistribution and Its Dynamic Changes among the Elderly in China: 2002–2018," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(5), pages 84-104, September.
    6. Shaik, Muhammad Raees & Goh, Soo Khoon & Wong, Koi Nyen & Law, Chee Hong, 2024. "Does population aging coexist with income inequality in the long run? Evidence from selected Asia-Pacific countries," Economic Systems, Elsevier, vol. 48(1).
    7. Xinxin Wang & Jingjing Hong & Pengpeng Fan & Shidan Xu & Zhixian Chai & Yubo Zhuo, 2021. "Is China’s urban–rural difference in population aging rational? An international comparison with key indicators," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1866-1891, September.
    8. Kausar Kiran & Dr. Muhammad Ali Gardezi, 2024. "Green Energy Strategies and Their Effect on Natural Resource Sustainability in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 126-135.
    9. Diana Barros & Aurora A. C. Teixeira, 2021. "Unlocking the black box: A comprehensive meta-analysis of the main determinants of within-region income inequality," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 41(1), pages 55-93, February.

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