We compare household income panel data from China, Germany, the UK, and the US. Consistent with previous research, we show that income is more unequally distributed in China than in the three Western countries. But China also has a higher level of income mobility. Because mobility has an income-equalising effect, the snapshot measures of inequality overstate the true level of inequality in China to a greater degree than they do for the other countries. But even after we have taken into account the impact of mobility, it is still the case that permanent income is more unequally distributed in China than in the US, the UK, and Germany. Moreover, in the three Western countries, the lion’s share of income inequality is between individuals rather than within individual. The opposite holds for China. In light of our findings, we discuss whether the sharp rise of income inequality in China can be understood in terms of the Kuznets inverted-U-shaped curve.
Tak Wing Chan is a Professor of Quantitative Social Science at University College London, Institute of Education. He has previously taught at Universities of Oxford, Surrey, and Warwick. His main research interests are social inequality and mobility, demography and the life course, and the sociology of culture.