Abstract
This chapter is made up of four sections. Section 3.1 reviews the change of income distribution system in China’s urban area (including cities and towns) since its reform and opening up to the world. The analysis focuses on the dynamics of income inequality of urban residents. Sections 3.2 and 3.3 are devoted to analyzing main determinants of income inequality and its dynamics in light of income structure and household features, respectively. Section 3.4 looks into some macroscopic economic variables in terms of their influence on the change of urban residents’ income inequality.
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Notes
- 1.
It is necessary to add that \( {G_k} \) is calculated by the descending order of resident’s total income. Unlike the Gini coefficient calculated by the order of the income of item \( k \) itself, \( {G_k} \) reflects the gap between the income of item \( k \) and total income, so it is called Pseudo Gini coefficient, or concentration rate of the income of item \( k \) by some scholars. It indicates, however, the exact relation of \( k{\hbox{th}} \) income to total income, that is, what it suggests in the formula. In general, Pseudo Gini coefficient of \( k{\hbox{th}} \) income is related to the Gini coefficient of total income inequality in three ways: first, Pseudo Gini coefficient of \( k{\hbox{th}} \) income is positive and larger than the Gini coefficient of total income. In this case, the inequality of \( k{\hbox{th}} \) income is larger than total income inequality, so \( k{\hbox{th}} \) income enlarges the inequality of the total income; second, Pseudo Gini coefficient of \( k{\hbox{th}} \) income is positive but lower than the Gini coefficient of total income. In this case, the \( k{\hbox{th}} \) income inequality is lower than the inequality of total income, and decreases the inequality of total income relatively; third, Pseudo Gini coefficient of \( k{\hbox{th}} \) income is negative, indicating that it is concentrated in low-income group and contributes to decrease inequality of total income absolutely. When \( k{\hbox{th}} \) income is in the same order as in total income, \( {G_k} \) then is the real Gini coefficient of \( k{\hbox{th}} \) income.
- 2.
One of the authors (Chen Zongsheng and Zhou Yunbo 2002) did a similar research on Tianjin residents, taking individual resident as analyzing unit, a little different from the study here which takes households as analyzing unit.
- 3.
We have done similar research on Tianjin Urban households with survey data of 1988 and 1998. The outcome shows that the inequality among urban residents of differing educations contributes to total income inequality by 6.28% in 1988 and 8.01% in 1998. For detailed information, see Chen Zongsheng and Zhou Yunbo (Chen and Zhou 2001a, b, c).
- 4.
In 1998, measured by Theil Index, inequality among different employments contributed to total income inequality by 18.61%. (For detailed analysis, see Chen Zongsheng and Zhou Yunbo, More Remarks on Income Distribution During China’s Reform and Development. Economics and Science Publisher, 2002: p. 168.)
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Zhou, Y., Qin, Y. (2012). Income Inequality of China’s Urban Residents and the Factors Which Impact It. In: Empirical Analysis on Income Inequality of Chinese Residents. Gu Shutang Academic Fund of Economics, vol 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24952-5_3
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