Abstract

This study attempts to analyze the trend and patterns of income inequality in China between 2012 and 2018 by using household income per capita data which comes from four waves China Family Panel Studies. The study finds that China income inequality appears a increase trend during this period. Based on Shorrocks decomposition approach and Lerman-Yitzhaki decomposition approach, the study finds that that wage income and transfer income have dominant percentage contribution to total inequality, and also finds that wage income have a positive role in decreasing income inequality and transfer income have a counter-intuitive negative effect on equalizing overall income distribution.