Accumulation of human capital is indispensable to spur economic growth. If students fail to acquire needed skills, not only will they have a hard time finding high-wage employment in the future but the development of the economies in which they work may also stagnate owing to a shortage of human capital. The overall goal of this study is to try to understand if China is ready in terms of the education of its labour force to progress from middle-income to high-income country status. To achieve this goal, we seek to understand the share of the labour force that has attained at least some upper secondary schooling (upper secondary attainment) and to benchmark these educational attainment rates against the rates of the labour forces in other countries (e.g. high-income/OECD countries; a subset of G20 middle-income/BRICS countries). Using the sixth population census data, we are able to show that China's human capital is shockingly poor. In 2010, only 24 per cent of China's entire labour force (individuals aged 25–64) had ever attended upper secondary school. This rate is less than one-third of the average upper secondary attainment rate in OECD countries. China's overall upper secondary attainment rate and the attainment rate of its youngest workers (aged 25–34) is also the lowest of all the BRICS countries (with the exception of India for which data were not available). Our analysis also demonstrates that the statistics on upper secondary education reported by the Ministry of Education (MoE) are overestimated. In the paper, we document when MoE and census-based statistics diverge, and raise three possible policy-based reasons why officials may have begun to have an incentive to misreport in the mid-2000s.
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China has experienced rapid economic growth over the past two decades and is on the brink of eradicating poverty. However, income inequality increased sharply from the early 1980s and rendered China among the most unequal countries in the world. This trend has started to reverse as China has experienced a modest decline in inequality since 2008. This paper identifies various drivers behind these trends – including structural changes such as urbanization and aging and, more recently, policy initiatives to combat it. It finds that policies will need to play an important role in curbing inequality in the future, as projected structural trends will put further strain on equity considerations. In particular, fiscal policy reforms have the potential to enhance inclusiveness and equity, both on the tax and expenditure side.
Although much has been written about annual income inequality in China, little research has been conducted on longer-run measures of income inequality and on income mobility. This paper compares income mobility of urban individuals in China and the United States in the 1990s. The following questions are taken up: To what extent are measures of annual income inequality misleading indicators of long-run income inequality? How much income mobility was there in China in the first half of the 1990s and how did this compare with mobility in other countries? Have real income increases been greater for the poor or the rich? How important is the variation in permanent incomes in China and how has this changed? JEL classifications: D31, D63, O15.
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