From Workers to Capitalists in less than Two Generations: A Study of Chinese Urban Elite Transformation between 1988 and 2013

Seminar notes

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From Workers to Capitalists in less than Two Generations: A Study of Chinese Urban Elite Transformation between 1988 and 2013

Li Yang, (PSE) (presenter), Filip Novokmet (U. Bonn), Branko Milanovic (UNY) - Full paper

Collège de France/INSEAD, Brown Bag seminar

Motivation

• Last 40 years: Chinese economic growth unprecedented
• Same time, dramatic increase in GINI

What/How they do?

• Use harmonized household surveys covering 1988-2013 -> Focus on economic elites in urban CN. 
• Split the country into 3 zones (East, central, West)
• Relatively consistent data over this short period although equivalent to 2 centuries of growth in the US or GB.

Related Literature

Early focus of the CN econ literature on:

• Industrial sector (structural change)
• Political dominance & econ

-> Not much on inequalities and economic elite so far

Stat desc on the economic elite

• Share of elite into total income is increasing since 1988 -> 21% to 30% for top 10%
• Focusing on the source of income of the top 5 percent, their income used to be largely dominated by public sector income, it’s now less than 50%. 
• Elite income from the private sector increases 10 times from 0.8% of total urban income to 8% of total urban income.

Social composition of the top 5%

• 3/4 are the old social groups (workers, clerical, government officers)

• In 2013, half of the elites are from the new social groups (professionals, business owners)

• Workers are under-represented in the top 5% while Professionals and Private Business wonders are over-represented

Education composition of the top-5%

• The share of university graduates goes from 12% to 44% between 1988 and 2013
• Primary and middle educated people are the declining group(70%->25%) in the same

Communist party membership & the top 5%

• 6% of the population is a member of the communist party
• within the top-5%, it is between 40% and 50%. 
• CCP membership is however non significant to explain income, except for big business owners.