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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2013, Vol. 8 Issue (3) : 452-466
research-article |
Report of China Household Income Disparity
Survey and Research Center for China Household Finance, SWUFE()
Survey and Research Center for China Household Finance, Southwestern University of Finance and Economics (SWUFE), Chengdu 610074, China
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Based on China Household Finance Survey (CHFS) data, China’s Gini Coefficient stood at 0.61 in 2010, above the global average of 0.44, according to the World Bank. The high Gini Coefficient represents a large income disparity of the country. It is understandable that a high Gini is common in fast-growing economies and can be reduced through government’s transfer payments given the experience of OECD countries. This paper illustrates the breakdown of China’s Gini, regional, rural and urban differences in household income. Specifically, it is found that poor health, insufficient social welfare and low education level are the main reasons for poverty of rural households. This paper also provides solutions to reduce the Gini coefficient. In the short term, China government can invest more on social insurance and implement large-scale transfer payments. The figure shows that China government has sufficient financial sources to strengthen secondary distribution to subsidize the low-income group. In the long term, government can increase overall educational level and reduce the opportunity inequality to narrow the income gap.

Keywords household finance      Gini      income disparity      social welfare      transfer payment     
Corresponding Authors: Survey and Research Center for China Household Finance, SWUFE,   
Issue Date: 05 September 2013
 Cite this article:   
Survey and Research Center for China Household Finance, SWUFE. Report of China Household Income Disparity[J]. Front Econ Chin, 2013, 8(3): 452-466.
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