What Lies behind Rising Earnings Inequality in Urban China? Regression-based Decompositions

Coupled with advances in enterprise reform and changes in the wage structure, earnings inequality in urban China has been increasing, and this has contributed significantly to rising income inequality. Using urban household survey data from the 1988, 1995 and 2002 waves of the China Household Income Project, in this paper, we decompose earnings inequality in urban China by using the regression-based decomposition methods developed by Fields (1998), Morduch and Sicular (2002) and Shorrocks (1999). The decomposition results indicate that the effects of gender and membership of the Communist Party of China on earnings inequality have changed little. While work experience had a reduced effect on earnings inequality, the effects of education and occupation have increased. The contributions of ownership status and industry to earnings inequality have increased. Regional effects have been the largest recent contributor to earnings inequality.earnings inequality, regression-based decompositions, urban China

The Curious Case of Son Preference and Household Income in Rural China

2008

Education and the Poverty Trap in Rural China

2008

Economic Growth and Child Poverty Reduction in Bangladesh and China

This paper analyzes child poverty in Bangladesh and China during periods of rapid economic growth in both countries. It compares the extent as well as profile of child poverty in both countries. Comparisons on the extent of child poverty, over time and across countries, are made using a decomposition framework attributing child poverty differences to differences in the three components mean child income, demographic circumstances and the distribution of child income. Child poverty is found to be more extensive in Bangladesh than in China, and is very much a problem for rural children in both countries. The results show that economic growth can reduce child poverty but does not do so always. For understanding changes over time and across countries in the extent of child poverty, it can be necessary to also consider changes/differences in the distribution of child income as well as in the demographic composition.Bangladesh, economic growth, child poverty, China

Evolution of the Industrial Wage Structure in China Since 1980

Industry mean wages in China have exhibited sharply increased dispersion since the early 1990s. The upward trend in differences of average wages among major industry groups parallels increases in wage and income inequality not only between rural and urban sectors but within the urban economy as well. Research on the trend has focused on (1) how market forces have led to a better match between worker pay and worker skills; on (2a) how the growing share of employment in the private sector has “caused” growing wage inequality; and (2b) how residual government control in a few industrial sectors has contributed to wage inequality due monopoly rent sharing. We show that the industrial wage dispersion in China has evolved to match long-recognized international patterns of industrial wage dispersion and that an increasing proportion of industrial wage dispersion can be explained as returns to observed worker characteristics.inequality, China, industry-wage structure

China's lesser known migrants

In China hukou (the household registration system) imposes barriers on permanent migration from rural to urban areas. Using large surveys for 2002, we find that permanent migrants number about 100 million persons and constitute approximately 20 percent of all urban residents. Receiving a long education, being a cadre or becoming an officer in the People's Liberation Army are important career paths towards urbanisation and permanent migrants are much better-off then their counterparts left behind in rural China. The probability of becoming a permanent migrant is positively related to parental education, belonging to the ethnic majority and the parent's membership in the Communist Party. At the destination, most permanent migrants are economically well-integrated. They have a higher probability to be working than their urban-born counterparts and those who receive a hukou before age 25 typically earn at least as much as their urban-born counterparts. The exceptions for this are those permanent migrants who receive a hukou after age 25 and people who received their hukou through informal routes

Social assistance receipt and its importance for combating poverty in urban China

Since the second half of the 1990s economic restructuring in urban China has led to widespread joblessness and income insecurity. The rapid expansion of the system of social assistance, Di Bao, can be understood from this perspective. Using a survey covering large parts of urban China in 2002, we investigate factors affecting receipt and how receipt affects urban poverty. Results from estimating probability models indicate that social assistance receipt is strongly linked to joblessness among household members, the household’s expenditure burden, as well as the lack of financial assets. Further, a long education of the household head and membership in the Communist Party reduces the probability of receiving social assistance while having been sent to rural China during the Cultural Revolution increases it. For some types of households, receipt of Di Bao differs greatly across cities in China. The social assistance payments appear strongly targeted to the poor. However, as the Di Bao payments typically are small and many of the urban poor are not receivers, much urban poverty remains

A new episode of increased urban income inequality in China

Chapter from: 'Rising Inequality in China: Challenge to a Harmonious Society', edited by Shi Li, Hiroshi Sato and Terry Sicular

The Lasting Impact of Mothers' Fetal Malnutrition on Their Offspring: Evidence from the China Great Leap Forward Famine

We find that second-generation effects of in utero and early childhood malnutrition on the school participation of the offspring of mothers who experienced the China Great Leap Forward Famine. The direct impact on entrance to senior high school is also negative, but smaller in magnitude than that on entrance to junior high school. Given that entering senior high school is contingent on completion of junior high school, the direct impact on entrance to senior high school obviously understates the total impact on the second generation’s accumulation of human capital. Our estimation results are generally robust to IV estimation.malnutrition, health, schooling, Barker hypothesis, China Famine