What Lies Behind Rising Earnings Inequality in Urban China? Regression-Based Decompositions

Posted: 8 Dec 2009

See all articles by Quheng Deng

Quheng Deng

Chinese Academy of Social Sciences (CASS)

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration

Date Written: July 2009

Abstract

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 article, we decompose earnings inequality in urban China by using the recently developed regression-based decomposition methods. 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.

Keywords: earnings inequality, regression-based decompositions, urban China

JEL Classification: D31, J31, O53

Suggested Citation

Quheng, Deng and Li, Shi, What Lies Behind Rising Earnings Inequality in Urban China? Regression-Based Decompositions (July 2009). CESifo Economic Studies, Vol. 55, Issue 3-4, pp. 598-623, 2009, Available at SSRN: https://ssrn.com/abstract=1519294 or http://dx.doi.org/ifp015

Deng Quheng (Contact Author)

Chinese Academy of Social Sciences (CASS) ( email )

Beijing, 100732
China

Shi Li

Beijing Normal University (BNU) - School of Economics and Business Administration ( email )

No.19 Xinwai Str
Haidian District
Beijing, 100875
China

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
383
PlumX Metrics