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Income Inequality and Subjective Wellbeing: Panel Data Evidence from China

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  • Zhang, Quanda
  • Awaworyi Churchill, Sefa
Abstract
Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.

Suggested Citation

  • Zhang, Quanda & Awaworyi Churchill, Sefa, 2019. "Income Inequality and Subjective Wellbeing: Panel Data Evidence from China," MPRA Paper 97543, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97543
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    6. Guoxin Fu, 2021. "Toward achieving sustainable development goal 3: Determinants, innovations, and reactions from 110 countries with different income levels," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(4), pages 607-623, July.
    7. Peihua Deng & Ronnie Schöb, 2022. "Group-Specific Redistribution, Inequality, and Subjective Well-Being in China," CESifo Working Paper Series 9847, CESifo.
    8. Long Yang & Haiyang Lu & Meng Li, 2023. "Multidimensional Inequality and Subjective Well-Being in China: A Generalized Ordered Logit Model Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(3), pages 1021-1052, February.
    9. Samuelson Appau & Sefa Awaworyi Churchill & Russell Smyth & Quanda Zhang, 2022. "Social Capital Inequality and Subjective Wellbeing of Older Chinese," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(2), pages 541-563, April.
    10. Ma, Yong & Chen, Diandian, 2020. "Openness, rural-urban inequality, and happiness in China," Economic Systems, Elsevier, vol. 44(4).
    11. Thomas Vendryes & Jiaqi Zhan, 2023. "Hukou-Based Discrimination, Dialects and City Characteristics," Documents de recherche 23-04, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    12. Hong Sun & Xiaohong Li & Wenjing Li & Jun Feng, 2022. "Differences and Influencing Factors of Relative Poverty of Urban and Rural Residents in China Based on the Survey of 31 Provinces and Cities," IJERPH, MDPI, vol. 19(15), pages 1-15, July.
    13. Ren, Yi-Shuai & Kuang, Xianhua & Klein, Tony, 2024. "Does the urban–rural income gap matter for rural energy poverty?," Energy Policy, Elsevier, vol. 186(C).
    14. Fry, Jane M. & Farrell, Lisa & Temple, Jeromey B., 2022. "Energy poverty and retirement income sources in Australia," Energy Economics, Elsevier, vol. 106(C).
    15. Jing Zhao & Wenshun Li, 2024. "The Impact of Digital Finance on the Urban–Rural Income Gap in China: The Mediating Role of Employment Structural Transformation," Sustainability, MDPI, vol. 16(19), pages 1-23, September.
    16. Zhang, Quanda & Appau, Samuelson & Kodom, Peter Lord, 2021. "Energy poverty, children's wellbeing and the mediating role of academic performance: Evidence from China," Energy Economics, Elsevier, vol. 97(C).
    17. Long Niu & Chuntian Lu & Rui Sun, 2023. "The Impact of Livelihood Capital on Subjective Well-Being of New Professional Farmers: Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-17, July.
    18. Lin Xie & Yingxi Shen & Yuanyang Wu & Hualei Yang, 2021. "The impact of retirement on mental health," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(5), pages 1697-1713, September.
    19. Penghu Zhu & Yingying Hu & Ning Zhang, 2024. "How does civilization promote happiness? Insights from the Civilized Cities Program in China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-18, December.
    20. Yulin Liu & Min Zhang & Rujia Liu, 2020. "The Impact of Income Inequality on Carbon Emissions in China: A Household-Level Analysis," Sustainability, MDPI, vol. 12(7), pages 1-22, March.

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    More about this item

    Keywords

    Subjective wellbeing; Identity; Inequality; hukou; Life satisfaction; China;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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