Top incomes and income polarisation in China

Zhang, Chen; Yu, Yangcheng

doi:10.1016/j.chieco.2022.101912

Cited by 1 publication

(2 citation statements)

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“…This is slightly different from the NBS's definition because their measure of income excludes various transfers and subsidies, such as food subsidies through the coupon system, pensions and housing subsidies. However, we note that these transfers and subsidies are important and that our definition of income has been used in most Chinese studies (see, e.g., Zhang et al, 2023). To account for price differences during the study period, we adjust the income level with the consumer price indices published by the NBS.…”

Section: Data and Variablementioning

confidence: 99%

“…Most Chinese studies have treated the income distribution of survey data as a right truncated Pareto distribution (see, e.g., Han & Cheng, 2019; Li et al, 2021; Zhang et al, 2023). That is to say, the underestimation of aggregate income is completely attributable to missing people who are richer than the richest sample in the survey (Bourguignon, 2018).…”

Section: Power‐law Model and Its Applicationmentioning

confidence: 99%

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Correction of China's income inequality for missing top incomes

Wan

2023

Review Development Economics

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After accounting for top incomes missing from the Chinese Household Income Project, this paper examines the income inequality trend in China during the 21st century. Our analysis, which involves fitting the upper tail of the income distribution to a power‐law model, reveals that the authoritative income survey data miss 0.68% of the population and 6.19% of aggregate income in 2018. Despite the most recent survey data providing better coverage of top incomes, our correction is still crucial. The raw survey data indicate a consistently increasing Gini coefficient between 2002 and 2018, but the corrected index starts to decline from 2013. Meanwhile, the revised top 1% income share increases from 7.01% in 2002 to 7.89% in 2013 and then slightly decreases to 7.64% in 2018, while the revised top 10% income share stabilises at around 33% throughout the period. Notably, China's revised top 10% and top 50% income shares in 2018 are close to those of the United Kingdom but are considerably lower than those of the United States.

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Section: Data and Variablementioning

confidence: 99%