Journal
ECONOMIC MODELLING
Volume 97, Issue -, Pages 210-219Publisher
ELSEVIER
DOI: 10.1016/j.econmod.2021.01.018
Keywords
Top incomes; Pareto model; Parametric bootstrap; Income inequality
Categories
Funding
- Major Project of National Social Science Fund of China [19ZDA116]
- Youth Project of National Social Science Fund of China [20CJY017]
- National Bureau of Statistics Research Project of China [2020LY033]
- Youth Project of Science Foundation of Ministry of Education of China [19YJC790056]
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This paper combines data from different datasets to estimate the level of income inequality of Chinese residents, finding that the actual level is significantly higher than previously thought. These results are crucial for informing income-related policies in China.
This paper estimates the level of income inequality of Chinese residents by combining data from the 2013 Chinese Household Income Project (CHIP 2013) and the Top Incomes in China in 2013 (TIC 2013). Specifically, we apply a Pareto model and a parametric bootstrap method to correct for missing top incomes in the CHIP 2013. After connecting the two datasets, we find that the level of income inequality measured by the Gini coefficient and top income share increases significantly compared with the CHIP2013 data. These conclusions are supported by robustness checks based on other household survey (HS) data and techniques (the expansion method and the direct splicing method). Our results not only facilitate understanding of China's true level of income inequality, but also provide evidence for income-related policies. It is essential, therefore, that we collect top-income data in China and connect it with the HS data.
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