Income inequality and subjective wellbeing: Panel data evidence from China

Housing wealth and happiness in Urban China

Previous studies examining the impact of social trust on happiness often face the difficulties of tackling the problems of potential endogeneity. Using an instrumental variables strategy and a two-stage residual inclusion approach, this paper explores the causal impact of social trust on individual happiness in China. We find robust evidence that a positive, causal relationship between social trust and happiness exist in China. We also find significant heterogeneity in the impact across genders and places of residence. The happiness of males and urban residents is more likely to be affected by social trust, compared to the happiness of female and rural residents, respectively. We further show that the key mechanisms through which social trust affects happiness are changes in self-reported health, social ties, perceived fairness of the society and subjective socioeconomic status.

Longitudinal Evidence on Social Trust and Happiness in China: Causal Effects and Mechanisms

Carbon pricing policies are effective tools for mitigating carbon emissions; however, they also alter income distributions. Progressive individual income tax systems help redistribute income and reduce inequality. This paper evaluates the effects of carbon pricing policies and revenue recycling schemes on inequality and assesses the redistributive effects of individual income tax. We adopt a dynamic multi-regional CGE model and extend it in terms of the labor supply, tax revenue, and government expenditures. We obtain several key findings. Carbon pricing without revenue recycling increased income inequality, and the Gini coefficient was 0.59% and 1.88% higher than the benchmark in 2030 and 2040, respectively. When the revenue was recycled via individual income tax returns, the proportional recycling scheme, i.e., all income groups had the same tax return rate, continued to widen the income gap. The progressive recycling scheme, i.e., lower income groups received higher tax return rates, narrowed the income gap by reducing distortions in the economy and enhancing the redistributive effects of individual income taxes. The Gini coefficient was 0.34% and 0.71% lower than the benchmark in 2030 and 2040, respectively. If the central government allocated the carbon revenue to the local governments via general transfer payments, the redistributive effect was magnified, but a pronounced economic distortion widened the income gap. If the tax return rates were categorized by labor groups, the pronounced vertical effect of the redistributive effect benefited income equality most, while the reranking effect weakened that benefit. 

Carbon pricing policy, revenue recycling schemes, and income inequality: A multi-regional dynamic CGE assessment for China

This study investigated the dynamic relationship between tourism, transport infrastructure, and income inequality using the novel panel data of China over 2000–2018. The results show the bidirectio...

Tourism, transport infrastructure and income inequality: A panel data analysis of China

Recently, increasing numbers of scholars have given attention to the mechanism connecting income inequality and happiness. This paper uses a multilevel model to verify the effect of income inequality at the city level on happiness and its moderating effect in China. It is found that income inequality is highly correlated to individual happiness. In the context of the transition China, people are inclined to report more happiness in places where income inequality is lower, after controlling for a number of demographic variables and economic factors. Moreover, this negative effect is relatively robust and significant, regardless of estimates with different covariates. It is worth noting that personal distributive justice beliefs play a momentous role in happiness. Specifically, as an effective social psychological mechanism, they can alleviate the negative effects of income inequality on happiness. A vital implication of the findings for social policy is that the model of economic development should be based on equity and justice and become a consistent source of happiness in this transitional period in China.

Income Inequality, Distributive Justice Beliefs, and Happiness in China: Evidence from a Nationwide Survey

Abstract In discussing government responses to the COVID-19 pandemic, the leadership of local officials is an important dimension that has been studied less than other aspects. From the perspective of political incentives, this paper empirically investigates the effect of the personal characteristics of municipal leaders, mainly their tenure of office and political rotation, on the prevention and control of the COVID-19 epidemic at the city level. The results indicate a negative relationship between tenure of office and the diagnostic rate of COVID-19. The experience of having diverse political rotation has strong positive effects on the prevention and control of the COVID-19 epidemic, especially in places with higher infection risks and better health resources. Due to the division of labor and cooperation between the Communist Party of China and the government, municipal party secretaries and mayors play different roles in the prevention and control of the COVID-19 epidemic. The findings contribute to understanding the dynamic relationship among political incentives, bureaucratic behaviors and performance in the anti-epidemic process in general.

Jiawen Huang

Papers

Income Inequality, Distributive Justice Beliefs, and Happiness in China: Evidence from a Nationwide Survey

Tenure of office, political rotation and the prevention and control of the COVID-19 epidemic in China