Working Paper: NBER ID: w23368
Authors: Thomas Piketty; Li Yang; Gabriel Zucman
Abstract: This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in China over the 1978-2015 period. We find that the aggregate national wealth-income ratio has increased from 350% in 1978 to 700% in 2015. This can be accounted for by a combination of high saving and investment rates and a gradual rise in relative asset prices, reflecting changes in the legal system of property. The share of public property in national wealth has declined from about 70% in 1978 to 30% in 2015, which is still a lot higher than in rich countries (close to 0% or negative). Next, we provide sharp upward revision of official inequality estimates. The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries and are now approaching U.S. levels.
Keywords: capital accumulation; private property; inequality; China
JEL Codes: D31; E01; E21; O53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high saving rates (D14) | national wealth-income ratio (D31) |
| rising asset prices (G19) | national wealth-income ratio (D31) |
| decline in share of public property (H13) | increasing wealth inequality (D31) |
| changes in property rights (P14) | rising income concentration (D31) |
| economic structure changes (L16) | rising income concentration (D31) |
| urban-rural income disparities (R11) | rising income dispersion (D31) |