درآمد سرمایه ای و نابرابری درآمد : مدارک و شواهد از مناطق شهری چین

Using the urban household survey data collected by the National Bureau of Statistics of China from 1988 to 2009, this study examines the distribution, composition, and changes in capital income and its contribution to income inequality. The data shows that capital income has increased considerably in past 20 years in urban China. Although the average value of capital income is still relatively low, the dispersion of capital income is significant, and for high-income earners capital income is substantial. Compared to other forms of income, capital income is distributed the most unequally, and its contribution to total income inequality has been growing. This study also examines capital income in China’s western, central, and eastern regions separately, and finds that capital income is highest and contributes the most to income inequality in the eastern region.

The recent rise in income inequality in urban China has attracted great attention from researchers and policy makers. Much of this attention has been focused on the magnitude of income inequality and the reasons for the rising inequality. As an individual’s income consists of both wage and non-wage incomes, rising income inequality may be caused by widening wage inequality as well as non-wage inequality. Previous research on income inequality in China has mostly focused on wage inequality and discovered that the changes in the wage structure, e.g., the increasing returns to education, and widened wage gaps between gender, industry, occupations, and regions, have led to the rising wage inequality in urban China (Chi et al., 2011, Meng, 2004, Appleton et al., 2005, Gustafsson and Li, 2001a, Knight and Song, 2003 and Knight and Song, 1991). In contrast to the many studies on wage inequality, there are relatively few studies that have focused on inequality in non-wage income, specifically capital income. Capital income has the potential to influence income inequality significantly. Capital income comes from the investment of tangible and intangible assets, and is comprised of interest, dividends, rent from leasing a property, profit from selling the property, or income from intellectual property. High-income earners tend to have greater assets and thus receive more capital income than low-income earners. Capital income is, then, accumulated as capital and generates more income, which consequently causes the further widening of income inequality. This effect is known as the Matthew effect (i.e., the rich get richer and the poor get poorer). In China, since the Shanghai and Shenzhen stock exchanges were founded in the early 1990s, investment channels for urban citizens have greatly expanded. Housing reform and the development of the housing market in the late 1990s have provided further opportunities for urban residents to acquire properties. With the fast-growing financial markets, many people in urban areas have accumulated considerable financial capital and have begun to enjoy the income stream it generates. In recent years, as capital income have grown so quickly, many people believe that it has become the major source of rising income inequality in China.1 Despite this popular belief, there is little evidence regarding the role of capital income in China’s rising income inequality. Motivated by this observation, in our paper we decompose income inequality into the components of wage income, capital income, and transfer income. With available data, we further decompose the inequality of capital income into specific sources. Considering the large income gaps between the western and eastern regions of China, we also conduct separate decompositions for different regions. We find that capital income have generally increased since the 1980s and is highly volatile. Capital income is also extremely unequally distributed among urban residents – the dispersion of capital income is much greater than that of earnings and transfer income. We find that the contribution of capital income to the Gini coefficient have increased in recent years, but it is still smaller than that of earnings, mostly because the share of capital income in the total income is relatively low. The rest of this paper is organized as follows: In Section 2, we introduce related studies in the literature. Section 3 provides background information about the growth of capital income in China. Sections 4 and 5 describe data and decomposition methods, respectively. The results are reported in Section 6. Section 7 summarizes and concludes the paper.

Using urban household survey data collected by the National Bureau of Statistics of China from 1988 to 2009, we examine the levels and changes of capital income and the contribution of capital income to income inequality. A number of important findings emerge from our study, among which the most important one concerns the large dispersion of capital income in urban China. Despite the relatively low level and share of capital income, the factor concentration ratio of capital income inequality is strikingly high, approaching a level comparable to such developed economies as the US, the UK and Germany. For most people, capital income is rather trivial, yet for top income earners it is substantial. Compared to wage income, capital income has a higher factor concentration ratio. Moreover, the factor concentration ratio of capital income has been increasing steadily, indicating the widening of the inequality in capital income in China. Another finding is that the level and dispersion of capital income are higher in the eastern region than in the central and western regions. The decomposition of capital income inequality suggests that investment income is the most important source of capital income and contributes most to capital income inequality. After the housing reform in 1995, rental income increased and began to make a substantial contribution to capital income inequality. Finally, going back to the questions posed in the beginning of the paper, we do not find evidence in support of the idea that capital income has become the major source of income inequality in urban China. Based on our analysis, wage income is still the predominant factor for rising income inequality. However, the concern about capital income is justified, as the distribution of capital income appears to be exceedingly unequal. With a possible increase in the share of capital income in the future, the contribution of capital income to inequality will rise further. Thus, our study calls attention to the widening inequality of capital income and its impact on overall income inequality.