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Changes in the causes of earnings inequality in urban China from 1988 to 2002

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  • Asuyama, Yoko

Abstract

This paper analyzes the causes of earnings inequality in urban China from 1988 to 2002. Earnings inequality in urban China continuously increased, even when adjusting for regional price differences. This paper reveals how the causes of earnings inequality changed between the periods 1988-1995 and 1995-2002 by reflecting labor-related institutional reform in China. Contrary to the situation from 1988 to 1995, between 1995 and 2002, employment status became the largest disequalizer, and the decline of inter-provincial inequality contributed to a reduction in entire earnings inequality. Individual ability, represented by education and occupation, received much greater rewards. Throughout the period from 1988 to 2002, a large part of the explained inequality increase was due to change in price (valuation of each individual's attributes) and not due to change in quantity (composition of individual attributes).

Suggested Citation

  • Asuyama, Yoko, 2008. "Changes in the causes of earnings inequality in urban China from 1988 to 2002," IDE Discussion Papers 176, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper176
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    File URL: https://ir.ide.go.jp/?action=repository_action_common_download&item_id=37991&item_no=1&attribute_id=22&file_no=1
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    More about this item

    Keywords

    China; Income distribution; Labor market; Earnings inequality; Inequality decomposition; 中国; 所得分配; 労働市場; 所得格差; 不平等度の分解; 格差尺度の分解;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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