Why are household incomes more unequally distributed in China than in Russia?
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Harmonised microdata show a Gini coefficient for per capita total income of 45.3% in China (2002) and 33.6% in Russia (2003). A much larger urban to rural income gap in combination with a much smaller proportion of people living in urban areas in China are important reasons for this cross-country difference in inequality. Wage is a more non-equalising income source in China than in Russia. While Russian public transfers reduce income inequality, Chinese public transfers increase income inequality. Cross-country differences in the process of transition are also found to be significant. A relatively large non-agriculture self-employment sector is non-equalising in rural China, but is also narrowing the urban to rural income gap. In contrast to the many cross-country differences revealed, we report income inequality among urban residents in China and in urban Russia to be very similar.
JOUR
Gustafsson, Björn
Shi, Li
Nivorozhkina, Ludmila
2011
Cambridge Journal of Economics
35
5
897-920
10.1093/cje/beq052
2746
