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Explaining China s Changing Income Inequality: Market vs. Social Benefits Qin Gao & Carl Riskin.

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Presentation on theme: "Explaining China s Changing Income Inequality: Market vs. Social Benefits Qin Gao & Carl Riskin."— Presentation transcript:

1 Explaining China s Changing Income Inequality: Market vs. Social Benefits Qin Gao & Carl Riskin

2 Table 1: Urban Gini Ratios 198819952002 Market Income 0.2690.3830.374 Total Income 0.2270.3360.345 Note: Urban market income includes wages, income from private enterprises, property income and rental value of owner-occupied housing. Total income also includes social benefits (cash and in-kind), private transfers, and taxes and fees (a negative item).

3 Table 2: Changes in Household Income in Urban China Levels (¥)Composition (%) 198819952002198819952002 Market Income2,4804,7448,054547378 Social Benefits1,9971,7382,559442725 Private Transfers 108120170222 Taxes & Fees-9-80-4500-4 Total Income4,5766,52110,333100

4 Table 3. Concentration Ratios of Broad Income Components (Pre-tax) 198819952002 Total market income0.200.31 Wages0.180.250.31 Rental value of own housing0.360.630.36 Total social benefits0.250.410.45 Total cash transfers0.330.320.31 Total in-kind transfers0.230.480.67 Private Transfers0.400.370.36 Total Pre-Tax Income (Gini)0.230.340.35

5 Table 4. Contribution of Income Sources to Overall Inequality (%) 198819952002 Total market income48.0565.7967.68 Wages39.2643.5349.98 Rental value of own housing6.1420.5316.83 Total social benefits47.8232.1930.67 Total cash transfers13.5410.3412.86 Total in-kind transfers34.2821.8617.81 Private Transfers4.132.021.65 Total Pre-Tax Income100

6 Table 5: Changes in Social Benefits in Urban China Levels (¥) Share of Income (%) 198819952002198819952002 Total Social Benefits1,9971,7382,559442725 Cash Transfers4337211,57091115 -Social Insurance2806841,44361014 -Supplementary Income 1533481311 -Public Assistance1246000 Health186325684457 Housing86262924619102 Food Assistance51043471110 Other In-kind61912000

7 Table 6. Concentration Ratios of Urban Social Benefit Components 198819952002 Social Insurance0.420.320.31 Supplementary income0.140.200.39 Public assistance-0.040.43-0.13 Health0.190.450.83 Housing0.300.510.31 Food0.120.270.41 Other in-kind0.410.330.40 Total Pre-Tax Income (Gini)0.230.340.35

8 Table 7. Contribution of Social Benefits to Overall Urban Inequality (pre-tax) (%) 198819952002 Total Social Benefits47.8332.2030.67 Housing24.9414.382.02 Social Insurance11.439.9912.17 Food5.680.530.51 Health3.416.6615.15 Supplementary income2.120.300.85 Public assistance0.000.05-0.16 Other in-kind0.250.290.13

9 Table 8: Changes in Household Per Capita Income, Rural China Levels(yuan ) Composition(%) Year198819952002198819952002 Market Income 18742500318710010299 Social Benefits 112120111 Private Transfers 342283213 Taxes & fees -39-99-85-2-4-3 Total Income 188124443205100

10 Table 9. Sources of Reduced Inequality of Rural Income

11 Table 10. Changes in Per Capita Social Benefits, Rural China Level (Yuan) Composition(%) 198819952002198819952002 Cash Transfers91417011 Social Insurance6616000 Supplementary Income 000000 Public Assistance382000 Health011000 Housing000000 Food Assistance100000 Other In-kind benefits162000 Total Social Benefits112120111 Total Income188124443205100

12 Table 8: Share of Tax Payments in Total Household Income by Decile in Rural China (%) Decile198819952002 115.6916.856.78 23.257.954.80 33.137.744.07 42.546.743.99 52.406.403.58 62.215.683.31 72.034.802.94 81.733.842.41 91.442.892.06 100.951.341.37 Total2.074.052.65

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