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Inequality of Opportunity in Earnings in Rural China

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  • Shi, X.

Abstract

This paper seeks to quantify the role of inequality of opportunity in individual earnings that is associated with family background, gender, ethnic minority status, region of birth and birth cohorts in rural China. Using the China Labour-force Dynamics Survey (CLDS) for 2014, we find that the share of inequality of opportunity in individual earnings in rural China for the full sample is 20.4 percent. A Shapley-value decomposition approach reveals the contribution of each of the circumstances. This result varies across birth cohorts: the youngest cohort 1981-1990 has the lowest total inequality in earnings, but it turns out to be the one with highest circumstantial inequality as well as the partial inequality of opportunities stemming from each of the circumstances, with the only exception of gender. A closer investigation shows that three effort variables own education, off-farm employment and marital status are pivotal in determining income inequality, but migration is not. Circumstances influence individual earnings, not only directly, but also indirectly through these three effort variables. Acknowledgement : The author is most grateful for the technical assistance (sharing related Stata and R codes) provided by Dr. Francisco H. G. Ferreira at the World Bank, Professor Markus J ntti at Stockholm University in Sweden and Dr. Florian Ch vez Ju rez at the National Laboratory for Public Policy in Mexico City,and also for the insightful comments made by Dr. Jane Golley at the Australian National University.

Suggested Citation

  • Shi, X., 2018. "Inequality of Opportunity in Earnings in Rural China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277016, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277016
    DOI: 10.22004/ag.econ.277016
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