Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282846 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16719
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using household data from 1988 to 2018, we confirm that the increase in income inequality in China has come to a halt in recent years but show that inequality in wealth and consumption continues to increase. We report a clear convergence of inequality across the different dimensions of income, consumption, and wealth. Households at the top of one dimension are increasingly located at the top of the other two dimensions. The mechanisms for such convergence across dimensions are analysed, and the savings rate links income and consumption, while capital accumulation is the central mechanism linking income and wealth. In addition, the wealth and income structure contribute to intensifying the convergence trend. We argue that the relatively high level of inequality in China may continue since income, consumption and wealth are increasingly reinforcing each other.
Subjects: 
return rate of capital
property income
savings rate
economic inequality
convergence mechanism
JEL: 
D31
I31
P52
Document Type: 
Working Paper

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