How Common Is the Prosperity? The Trends and Nature of China's Income Inequality, 1988–2018

ABSTRACT We use nationally representative survey data to study income inequality in China from 1988 to 2018. Our findings show that the rising income inequality during this period has been driven by the considerable income growth experienced by the highest earners, rather than stagnation or decline in the incomes of those at the bottom. Even individuals at the very bottom of the income distribution have experienced remarkable absolute real income growth. We further show that the increase in top incomes was largely due to labour income, and government redistribution had only a minor effect in mitigating the worsening of income inequality.