Income inequality in China 1952-2017: persistence and main determinants

• Authors: Marinko Skare , Luis A. Gil-Alana , Gloria Claudio-Quiroga , Romina Pržiklas Družeta

Abstracts

EN

Research background: China's economic growth, however remarkable, is due to the Harrod-Domar nature of economic growth and, therefore, limited. The main limitation lies in the extension of the neoclassical growth model and the government need to decrease regional disparities using new migration, urbanization and social policy. Purpose of the article: It is the rising regional disparity in the total factor productivity to cause the income inequality increase (measured by GINI index) in China from 1952-2017. Our paper brings new insight into the main inequality determinants and causes in China, using a fractional integration modeling framework. Methods: Using fractional integration, we find total factor productivity (TFP), real gross domestic product per capita and growth and expenditures for the social safety net and employment effort to have a statistically significant impact on GINI. Income inequality in China is of a persistent nature with the effects of the shocks affecting the GINI index enduring over time. Findings & value added: The results of this study highlight the importance for model/policy changes by the policy makers and practitioners in China to deal with the inequality issue. This involves improving the growth model through innovation and technological advancement, relaxing TFP dependence on the physical inputs (labor and capital) to reduce income inequality.

Keywords

EN

China; income inequality; fractional integration; persistence; economic growth

• Publisher: Instytut Badań Gospodarczych
• Journal: Oeconomia Copernicana
• Year: 2021
• Volume: 12
• Issue: 4
• Pages: 863-888

Dates

published

2021

Contributors

author

Marinko Skare

• Juraj Dobrila University of Pula

• https://orcid.org/0000000164263692

author

Luis A. Gil-Alana

• University of Navarra
• Universidad Francisco de Vitoria

• https://orcid.org/0000000257603123

author

Gloria Claudio-Quiroga

• Universidad Francisco de Vitoria

• https://orcid.org/0000000165838523

author

Romina Pržiklas Družeta

• Juraj Dobrila University of Pula

• https://orcid.org/0000000289835201

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Identifiers

DOI

10.24136/oc.2021.028

Biblioteka Nauki

19233721