Globalization and Regional Income Inequality--Evidence from within China

China¡¯s recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter-region income inequality in China. This paper discusses China¡¯s globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that (a) globalization constitutes a positive and substantial share to regional inequality and the share rises over time; (b) capital is one of the largest and increasingly important contributor to regional inequality; (c) economic reform characterized by privatization exerts a significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.

Globalization and Regional Income Inequality: Evidence from within China

globalization, inequality, decomposition, Shapley value, China

Inter-Industry Wage Differentials: An Increasingly Important Contributor to Urban China Income Inequality

How significantly inter-industry wage differentials contribute to rising income inequality is an essential policy issue for transitional economies. Using regression-based inequality decomposition, this paper finds that inter-industrial wage differentials contributed increasingly to income inequality in urban China through 1988, 1995, and 2002, mainly due to rapid income growth in monopolistic industries. Factors such as region, education, ownership, occupation, and holding a second job also contribute increasingly to income inequality, while being employed the whole year and age have decreasing contributions. If China seeks to reduce urban income inequality, removing entry barriers in the labor market and breaking monopoly power in the goods market are essential policy prescriptions.Inter-industry wage differntials, Income ineqality, Regression-based decomposition

The Inequality-Growth Nexus in the Short and Long Runs: Empirical Evidence from China

inequality, growth, polynominal inverse lag