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Influence of Social Institutions on Inequality in China

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  • Uchimura, Hiroko

Abstract

This study analyses the impact of changes in social institutions, i.e. in the informal and formal social security system, on income inequality in China. This study uses an inequality decomposition analysis approach comparing household survey data for 1988 with 1995.Three main results emerge from the analysis: first, it findsthat the family based social security is losing its importance mainly through the changes in employment pattern in a household. This change contributes to rising income inequality. Second, thestudy shows that the introduction of new formal social security system helped to equalise the distribution of retired household members' income in urban areas in 1995. Third, however, these changes have only benefited a restricted number of persons. Benefits for rural migrants are low and most of the rural population has still no access to the new system.

Suggested Citation

  • Uchimura, Hiroko, 2005. "Influence of Social Institutions on Inequality in China," IDE Discussion Papers 26, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper26
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    References listed on IDEAS

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    2. Knight, J. & Song, L., 1999. "Economic Growth, Economic Reform anf Rising Inequality in China," Economics Series Working Papers 99210, University of Oxford, Department of Economics.
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    6. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
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    8. Kung, James K S & Lee, Yiu-fai, 2001. "So What If There Is Income Inequality? The Distributive Consequence of Nonfarm Employment in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 50(1), pages 19-46, October.
    9. Hussain, Athar & Lanjouw, Peter & Stern, Nicholas, 1994. "Income inequalities in China: Evidence from household survey data," World Development, Elsevier, vol. 22(12), pages 1947-1957, December.
    10. Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
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    Cited by:

    1. Siong Hook Law & Hui Boon Tan, 2009. "The Role Of Financial Development On Income Inequality In Malaysia," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(2), pages 153-168, December.

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    More about this item

    Keywords

    Income Inequality; Social Institutions; Family; Social Security; Household; Income distribution; China; 家族; 社会保障; 家計; 所得分配; 中国;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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