Jiandong Chen

The Trend of the Gini Coefficient of China

A literature review indicates that the main problem in calculating the Gini coefficient of Chinese residents’ income is the shortcomings of the data sources. Though many studies have tried to overcome these limitations through decomposing the nationwide Gini ratio by urban and rural areas, the final results have been underestimated, due to the overlap term or residual in the decomposition. This paper analyses the effects of the overlap term on calculating the overall Gini coefficient through a statistical approach, and estimates Chinese Gini ratios since economic reform and open door policies were adopted. Based on decomposing the Chinese Gini coefficient from 1978 to 2006, the authors find that the key factor of income inequality comes from income disparity between rural and urban inhabitants. The authors investigate the features of this income inequality between rural and urban areas. Furthermore, statistical approaches are employed to evaluate the effects of the development of urbanisation and rural-to-urban average income on the income inequality of the whole nation. The results show that accelerating the pace of urbanisation is the key issue to improving Chinese income disparity. On the basis of the above analysis, the paper proposes related policies for policy-makers.

Chinese Gini Coefficient from 2005 to 2012, Based on 20 Grouped Income Data Sets of Urban and Rural Residents

Data insufficiency has become the primary factor affecting research on income disparity in China. To resolve this issue, this paper explores Chinese income distribution and income inequality using distribution functions. First, it examines 20 sets of grouped data on family income between 2005 and 2012 by the China Yearbook of Household Surveys, 2013, and compares the fitting effects of eight distribution functions. The results show that the generalized beta distribution of the second kind has a high fitting to the income distribution of urban and rural residents in China. Next, these results are used to calculate the Chinese Gini ratio, which is then compared with the findings of relevant studies. Finally, this paper discusses the influence of urbanization on income inequality in China and suggests that accelerating urbanization can play an important role in narrowing the income gap of Chinese residents.

The Trend of the Chinese Gini Coefficient

The literature shows that the main problem with calculating the Gini coefficient of Chinese residents’ incomes is the limitations of the data source. Though many studies have tried to overcome the limitations by decomposing the nationwide Gini coefficient into urban and rural areas, the final results were underestimated due to the overlap term or residual in the decomposition. This paper analyzes the effects of the overlap term on calculating the overall Gini coefficient through the statistical approach, and estimates the Chinese Gini coefficients since the economic reform and open door policies have been adopted. By decomposing the Chinese Gini coefficient from 1978 to 2006, the authors find that the key factor in income inequality is the income disparity between rural and urban inhabitants. Moreover, the authors investigate the features of the income inequality between rural and urban areas. Furthermore, statistical approaches are employed to evaluate the effects of the development of urbanization and the rural to urban average income on the income inequality of the whole nation. The results show that accelerating the pace of urbanization is the key to improving the Chinese income disparity. On the basis of the above analysis, the paper proposes related policies for policy-makers.

On the Tendency of the Gini Coefficient between Chinese Rural and Urban Areas from 1978 to 2012

By analyzing the Gini coefficient between rural and urban areas, we explore the general changing tendency of income inequality between rural and urban residents. In particular, we investigate Chinese rural-urban income disparity from1978 to 2012. The result shows that the growth of urban population led to the increase of urban-rural income disparity from 1978 to 2001 and tended to narrow urban-rural income inequality after 2001. 2005 to 2012 provincial data also indicated that the Gini coefficient decreased with the acceleration of the urbanization process.