IDEAS home Printed from https://ideas.repec.org/p/kan/wpaper/202502.html
   My bibliography  Save this paper

Measurement and Decomposition Analysis of Occupational Income Inequality in China

Author

Listed:
  • Jing Yuan

    (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China)

  • Teng Ma

    (Penglai Sub-branch, Industrial and Commercial Bank of China Limited Company, Yantai, Shandong 264005, China)

  • Yinghui Wang

    (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China)

  • Zongwu Cai

    (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA)

Abstract

Using the China CFPS database, this paper measures the degree of intra-occupational inequality in China with the Pareto coefficient and uses the GE index to decompose the top income gap by region as well as by industry. The empirical results show that, firstly, the degree of income inequality between occupations in China has increased significantly in recent years. The provinces with a higher degree of income inequality between occupations are mostly located in the more economically developed regions in the central and eastern parts of the country, while the degree of inequality between occupations in the western part is lower. Secondly, the highest-income occupations are mainly in the manufacturing industry, with relatively high levels in the construction industry, the education sector, the wholesale and retail trade, and public administration and social organizations, while the levels in other occupations are relatively low. Lastly, the top income gap primarily originates from within industries. However, the contribution rate of the top income gap between industries is gradually increasing, while the contribution rate of the top income gap within industries is gradually decreasing.

Suggested Citation

  • Jing Yuan & Teng Ma & Yinghui Wang & Zongwu Cai, 2025. "Measurement and Decomposition Analysis of Occupational Income Inequality in China," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202502, University of Kansas, Department of Economics, revised Jan 2025.
    • Handle: RePEc:kan:wpaper:202502
    as

    Download full text from publisher

    File URL: https://kuwpaper.ku.edu/2025Papers/202502.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Piketty & Li Yang & Gabriel Zucman, 2019. "Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015," American Economic Review, American Economic Association, vol. 109(7), pages 2469-2496, July.
    2. Hero Ashman & Seth Neumuller, 2020. "Can Income Differences Explain the Racial Wealth Gap: A Quantitative Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 35, pages 220-239, January.
    3. Alvarez-Pelaez, Maria J. & Diaz, Antonia, 2005. "Minimum consumption and transitional dynamics in wealth distribution," Journal of Monetary Economics, Elsevier, vol. 52(3), pages 633-667, April.
    4. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-1385, November.
    5. Gabriel Zucman, 2019. "Global Wealth Inequality," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 109-138, August.
    6. Fabio Braggion & Mintra Dwarkasing & Steven Ongena, 2021. "Household Inequality, Entrepreneurial Dynamism, and Corporate Financing [The colonial origins of comparative development: An empirical investigation]," The Review of Financial Studies, Society for Financial Studies, vol. 34(5), pages 2448-2507.
    7. Thomas Blanchet & Juliette Fournier & Thomas Piketty, 2022. "Generalized Pareto Curves: Theory and Applications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 263-288, March.
    8. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, February.
    9. Xiaobin He & Zhuo Huang, 2012. "Ownership Restructuring, Marketization and Wealth Inequality in Urban China: 1995 and 2002," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(5), pages 37-62, September.
    10. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    11. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    12. Patrick Ward, 2014. "Measuring the Level and Inequality of Wealth: An Application to China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 613-635, December.
    13. Shi Li & Haiyuan Wan, 2015. "Evolution of wealth inequality in China," China Economic Journal, Taylor & Francis Journals, vol. 8(3), pages 264-287, September.
    14. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 519-578.
    15. Chengze Simon Fan, 2003. "Human Capital, Study Effort, and Persistent Income Inequality," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 311-326, May.
    16. Shi Li & Renwei Zhao, 2007. "Changes in the Distribution of Wealth in China 1995-2002," WIDER Working Paper Series RP2007-03, World Institute for Development Economic Research (UNU-WIDER).
    17. Jess Benhabib & Alberto Bisin & Mi Luo, 2017. "Earnings Inequality and Other Determinants of Wealth Inequality," American Economic Review, American Economic Association, vol. 107(5), pages 593-597, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jing Yuan & Yinghui Wang & Jinxin Cao & Zongwu Cai, 2025. "Impact of Artificial Intelligence on Occupational Income Inequality in China," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202504, University of Kansas, Department of Economics, revised Feb 2025.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jing Yuan & Xiaomin Liu & Yinghui Wang & Zongwu Cai, 2024. "Impact of Minimum Wage Standard on Occupational Income Inequality and Common Prosperity in China," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202404, University of Kansas, Department of Economics, revised Feb 2024.
    2. Jing Yuan & Teng Ma & Yinghui Wang & Zongwu Cai, 2025. "Measurement and Decomposition Analysis of Occupational Income Inequality in China," Stats, MDPI, vol. 8(1), pages 1-26, February.
    3. Thomas Blanchet & Bertrand Garbinti & Jonathan Goupille-Lebret & Clara Martínez-Toledano, 2018. "Applying Generalized Pareto Curves to Inequality Analysis," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 114-118, May.
    4. Lucas Chancel, 2019. "Ten facts about income inequality in advanced economies," Working Papers hal-02876982, HAL.
    5. Frank Cowell & Emmanuel Flachaire, 2021. "Inequality Measurement: Methods and Data," Post-Print hal-03589066, HAL.
    6. Thilo N. H. Albers & Charlotte Bartels & Moritz Schularick, 2024. "Wealth and Its Distribution in Germany, 1895-2021," Discussion Papers of DIW Berlin 2105, DIW Berlin, German Institute for Economic Research.
    7. Lucas Chancel & Thomas Piketty, 2019. "Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 33-62, November.
    8. Luis Bauluz & Yajna Govind & Filip Novokmet, 2020. "Global Land Inequality," PSE Working Papers halshs-03022318, HAL.
    9. Moritz Kuhn & Moritz Schularick & Ulrike I. Steins, 2020. "Income and Wealth Inequality in America, 1949–2016," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3469-3519.
    10. Thomas Blanchet & Ignacio Flores & Marc Morgan, 2022. "The weight of the rich: improving surveys using tax data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 119-150, March.
    11. Thomas Blanchet & Emmanuel Saez & Gabriel Zucman, 2022. "Real-Time Inequality," NBER Working Papers 30229, National Bureau of Economic Research, Inc.
    12. Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2019. "Tax Evasion and Inequality," American Economic Review, American Economic Association, vol. 109(6), pages 2073-2103, June.
    13. Filip Novokmet & Thomas Piketty & Gabriel Zucman, 2018. "From Soviets to oligarchs: inequality and property in Russia 1905-2016," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 189-223, June.
    14. Atanu Ghoshray & Issam Malki & Javier Ordóñez, 2022. "On the long-run dynamics of income and wealth inequality," Empirical Economics, Springer, vol. 62(2), pages 375-408, February.
    15. Clara Martínez Toledano, 2017. "House Price Cycles, Wealth Inequality and Portfolio Reshuffling," Working Papers halshs-02797549, HAL.
    16. Joachim Hubmer & Per Krusell & Anthony A. Smith Jr., 2020. "Sources of US Wealth Inequality: Past, Present, and Future," NBER Chapters, in: NBER Macroeconomics Annual 2020, volume 35, pages 391-455, National Bureau of Economic Research, Inc.
    17. Pawel Bukowski & Filip Novokmet, 2019. "Between Communism and Capitalism: Long-Term Inequality in Poland, 1892- 2015," World Inequality Lab Working Papers hal-02876995, HAL.
    18. Lustig, Nora, 2020. "The “Missing Rich” in Household Surveys: Causes and Correction Approaches," SocArXiv j23pn_v1, Center for Open Science.
    19. Laura A. Harvey & Jochen O. Mierau & James Rockey, 2024. "Inequality in an Equal Society," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 86(4), pages 871-904, August.
    20. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 553-609.

    More about this item

    Keywords

    Occupational income inequality; Pareto coefficient; GE index;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kan:wpaper:202502. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Professor Zongwu Cai (email available below). General contact details of provider: https://edirc.repec.org/data/deuksus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.