A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986

A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986–2009

December 12, 2016

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Format: Chicago

Haiyan Ding, and Hui He. A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986–2009, (USA: International Monetary Fund, 2016) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper is the first comprehensive empirical study of earnings, income, and consumption inequality in urban China from 1986 to 2009, using unique micro-level data from the Urban Household Survey (UHS). The paper documents a drastic increase in economic inequality for the sample period. The paper finds that consumption inequality closely tracks income inequality, both over time and over the life cycle. The paper believes that the main driver of this co-movement could be a dramatic increase in noninsurable idiosyncratic permanent income shocks after the early 1990s, associated with the economic transition in urban China.

Subject: Consumption, Disposable income, Income, Income inequality, Income shocks, National accounts

Keywords: Chinese economy, Consumption, Consumption inequality, Disposable income, Income, Income dynamics, Income inequality, Income inequality, Income shock, Income shocks, Income variance, Inequality over time and life-cycle, Nondurable consumption, Structural transformation, WP

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/239
Stock No:

WPIEA2016239
ISBN:

9781475560008
ISSN:

1018-5941

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