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Inequality and Growth in Modern China$
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Guanghua Wan

Print publication date: 2008

Print ISBN-13: 9780199535194

Published to Oxford Scholarship Online: May 2008

DOI: 10.1093/acprof:oso/9780199535194.001.0001

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Income Inequality in China and its Influencing Factors

Income Inequality in China and its Influencing Factors

(p.18) 2 Income Inequality in China and its Influencing Factors
Inequality and Growth in Modern China

Xiaolu Wang

Oxford University Press

While the average level of income per capita has increased rapidly in China, income inequality is becoming a more serious problem that may threaten social stability and the sustainability of economic development. This chapter examines the existence in China of an inverted U-shaped curve between income inequality and economic development (known as Kuznets curve), and tests for the effects of several factors possibly influencing income inequality. These factors relate to growth, institutional arrangements, income redistribution and social security systems, and provision of public goods and infrastructure. Panel data modelling based on provincial level observations predicts an increasing trend of inequality in the future.

Keywords:   Kuznets curve, income per capita, social stability, economic development

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