Structural Change and Income Distribution: Accounting for Regional Inequality in the People's Republic of China and its Changes During 1952–2012

34 Pages Posted: 4 Jan 2017

See all articles by Guanghua Wan

Guanghua Wan

Asian Development Bank Institute

Chen Wang

Shanghai University of Finance and Economics

Xun Zhang

Beijing Normal University (BNU)

Date Written: October 28, 2016

Abstract

This study explores the relationship between inequality and structural transformation by constructing a theoretical model, developing analytical frameworks, and implementing a case study. The general equilibrium model we develop demonstrates that inequality exhibits an inverted U shape as structural change proceeds from onset to completion. Our analytical frameworks enable decomposition of total inequality into sector contributions and a change in total inequality into a component attributable to structural transformation and the other component to concentration or spatial agglomeration. Applying the decomposition frameworks to data from the People’s Republic of China yield various interesting findings and more importantly confirms the inverted U shape as predicted by our theoretical model.

Keywords: structural transformation, structural change, income distribution, income inequality, inequality decomposition, spatial agglomeration, macroeconomics, China, 不均等, 收入分配, 结构变化

JEL Classification: D63, O53, R12, O18

Suggested Citation

Wan, Guanghua and Wang, Chen and Zhang, Xun, Structural Change and Income Distribution: Accounting for Regional Inequality in the People's Republic of China and its Changes During 1952–2012 (October 28, 2016). ADBI Working Paper 608, Available at SSRN: https://ssrn.com/abstract=2892926 or http://dx.doi.org/10.2139/ssrn.2892926

Guanghua Wan (Contact Author)

Asian Development Bank Institute ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Chen Wang

Shanghai University of Finance and Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

Xun Zhang

Beijing Normal University (BNU) ( email )

19 Xinjiekou Outer St
Haidian District
Beijing, Beijing 100875
China

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