Honors Theses
Does a Rising Tide Lift All Boats? An Analysis of China's Increasing Gini Coefficient from 1980-2006
Date of Award
1-1-2011
Document Type
Undergraduate Thesis
Department
Croft Institute for International Studies
First Advisor
Ali Gungoraydinoglu
Relational Format
Dissertation/Thesis
Abstract
Erin Singleton: Docs A Rising Tide Life All Boats? An Analysis of China's Increasing Gini Coefficient from 1980-2006 (under the direction of Dr. Ali Gungoraydinglu)
Income inequality has become a serious concern for both Chinese citizens and policy makers alike as the Gini coefficient has been consistently rising since the economic transition to a market economy began in 1978. The anti-globalization movement cites this increasing income gap as a negative result of China's entrance into the global market. On the contrary, supporters of globalization cite the dramatic decrease in China's poverty rate during this same period as evidence of globalization's success and claim that increased inequality is an initial necessary evil of economic development. This thesis uses multiple regression as well as the specific factors model to determine what factors have contributed to the increase in China's Gini coefficient from 1980-2006, as well as to determine whether or not those same factors have contributed to the decreasing poverty rate.
While many analyses focus on provincial level data, this study of income inequality employs aggregate data to obtain a greater understanding oftrends in China as a whole. The specific factors model forms the theoretical framework to demonstrate how the increase in China’s manufactures exports is linked to the decrease in agricultural incomes. The regression model supports the theory, showing that the declining share of the GDP held by the agricultural sector has the most substantive effect on China’s income inequality. Specifically, that it is ten times more important in predicting inequality trends than the next most substantive factor - trade.
In addition to identifying the variable that has the greatest effect on income inequality in the case of China, this thesis also demonstrates that the same model cannot be applied to all developing nations, as the results of a regression analysis of Brazil's Gini coefficient show that the factors affecting income inequality are not generalizable, but country-specific. A comparison ofthe beta coefficients ofthe significant variables provides a framework for developing policy to decrease income inequality in China amid fears that ifthe gap continues to widen there will be social and political ramifications.
Recommended Citation
Singleton, Erin, "Does a Rising Tide Lift All Boats? An Analysis of China's Increasing Gini Coefficient from 1980-2006" (2011). Honors Theses. 2790.
https://egrove.olemiss.edu/hon_thesis/2790
Accessibility Status
Searchable text