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households. Finally, Prof. Albert Park of HKUST and Prof. Yan Shen of
Peking University presented an estimate of the wealth gini coefficient
of 0.68 in 2010-11 based on surveys of over 10,000 households
(with at least one member age 45 or older) of the China Health and
Retirement Longitudinal Study run by Peking University. All of these
estimates are much higher than available estimates for the 1990s and
early 2000s. For example, according to Prof. Li survey-based estimates
from the China Household Income Project found the wealth gini to
be 0.40 in 1995 and 0.55 in 2002. Thus, the conference produced
the first credible estimates of very rapidly rising wealth inequality
in China during the first decade of the 21st century. Prof. Piketty
commented that if these numbers were accurate, it suggests that
China’s wealth inequality moved from being like Sweden to being like
the US in less than a decade!
All three authors found that the main contributor to high and rising
wealth inequality in China has been differences in housing wealth,
which all of the surveys found accounted for most of households’
total wealth. Many urban homeowners in China experienced
windfall gains from housing reforms in the late 1990s and early
2000s.Household had opportunities to purchase apartments from
their work units at very low prices, and all homeowners gained
from market windfalls associated with booming housing prices in
the 2000s as the real estate market developed rapidly, especially in
China’s largest cities. Prof. Park and Shen estimated that three fourths
of current housing values are from windfall gains. Because younger
adults in China are more likely to rent housing and not benefit from
similar gains as their parents, between-cohort inequality and the
role of inherited wealth may become important issues in China.
This highlights the relevance of Prof. Bourguignon’s advice that
governments focus on making sure that family wealth differences do
not lead to differences in education and other opportunities.
Several other presentations examined in more depth how institutions
influence inequality in China. Analyzing wage data from China’s 1%
population mini-census in 2005, Prof. Xiaogang Wu of HKUST found
that in Chinese cities rural migrant workers earned significantly
less than their urban counterparts, especially in government/state
institutions and state-owned enterprises, reflecting longstanding
differential treatment of rural and urban citizens dating back to
China’s socialist planning period. Decomposition analysis reveals that
the earning inequality is largely attributable to rural migrants working
in lower-paying occupations than local urban workers rather than
unequal pay within the same occupation.
Prof. Xin Meng of Australia National University analyzed several micro
data sets to investigate the impact of differences in parent’s education
caused by school interruptions due to a political event, the Cultural
Revolution, on their children’s educational attainment. The natural
experiment provides an opportunity to isolate the “nurture effect”
on children’s education, since exposure to the shocks was not
related to parent’s ability. She finds that a one year decrease in
the parent’s schooling due to schooling interruptions leads to
0.32-0.38 years less schooling for the child, and that a child
becomes 35-53% less likely to obtain a university degree if the
parent did not graduate from college. This suggests that the
intergenerational transmission of education is important in China.
Analyzing the China Household Income Project (2002), Prof.
Sylvie Demurger of GATE Lyon Saint-Etienne measured the
inequality of opportunity as the difference between the observed
earnings inequality and the inequality that would have prevailed
if circumstances such as parental characteristics, location of birth,
gender, and migration status are held constant. She found that
the most important circumstantial factor was one’s birth location
(rural or urban and coastal or inland), and that consistent with
Prof. Meng’s study parent’s education and parent’s political
background mattered amongst the cohort born after the Cultural
Revolution. However, when migrants are included in the sample
inequality of opportunity only explains 8% of observed inequality.
Extremely high levels of wealth inequality in contemporary
China represent large departures not only from more equitable
distribution of wealth during China’s early reform period and
socialist period, but also with wealth outcomes during imperial
China. Prof. James Lee of HKUST presented fascinating historical
evidence from different regions of China that equitable land
distribution, especially the absence of landless peasants,
characterized local regions during the late imperial period in
China. He argued that this reflects the norm that equitable
property distribution was the responsibility of the state, which
continued with the Communist Party leadership, who used
land reform to further reduce the number of “have-nots”.
However, this equity norm did not mean that inequality was not
transmitted across generations. Prof. Cameron Campbell of HKUST
presented evidence from analysis of large multigenerational
demographic data that high status founders of descent lines
could influence the descent line size and reproductive behavior
of descendants for over 150 years. This phenomenon shapes the
intergenerational transmission of knowledge, attitude, social or
economic or cultural capital and attributes that are conducive to
success.
Other interesting presentations on contemporary and historical
inequality in France were made by Jérôme Bourdieu (Paris School
of Economics), Louis-André Vallet (OSC SciencesPo), and Nicolas
Pistolesi (Toulouse School of Economics).
Prof. Francois Bourguignon
Prof. Thomas Piketty
