Rising Inequality in China and Globally — Highlights from World Inequality Report 2018
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| Lucas Chancel & Yang Li (Paris School of Economics) | |
| Friday 2 February 2018 at 12:00 - 1:30 pm (Hong Kong time, GMT +8) | |
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Room 3301 (Lifts 17-18) , Academic Building, HKUST |
Event Summary
The World Inequality Report 2018 seeks to fill a democratic gap and to equip various actors of society with the necessary facts to engage in informed public debates on inequality. In their academic seminar, Lucas Chancel and Yang Li (Paris School of Economics) presented highlights from The World Inequality Report 2018. Coordinated by Lucas Chancel along with Facundo Alvaredo, Thomas Piketty, Emmanuel Saez and Gabriel Zucman, the report provides the first systematic assessment of globalization in terms of inequality, over the past 40 years revealing that despite strong growth in emerging countries, global income inequality between individuals increased sharply since 1980 due to the rise of within-country inequality and may continue to do so. The top 1% captured twice as much global income growth as the bottom 50% since 1980. A careful analysis of country-level growth and inequality trajectories suggest that it is possible to combine higher growth and lower inequality. In the example of China vs. India, the report shows a rise in inequality in both countries but one that was extreme in India compared to a moderate rise in China. More investments in education, health, infrastructure for the bottom 50% in China demonstrate that diverging trajectories among similar regions highlight importance of policy.
The report also found a gradual rise in wealth income ratios since 1980s in the context of large transfers of public to private wealth in emerging and rich countries. While national wealth has substantially increased, public wealth is now negative or close to zero in rich countries. Arguably this limits the ability of governments to tackle inequality which has important implications for wealth inequality among individuals. Chancel and Li reported that a combination of rising income inequality and fall of public wealth contributed to sharp rise in wealth inequality among individuals. At the global level (China, Europe, and the US) the top 1% share of wealth increased from 28% in 1980 to 33% today, while the bottom 75% share hovered around 10%.
The future of global inequality depends on convergence forces (rapid growth in emerging countries) and divergence forces (rising inequality within countries). No one knows which of these forces will dominate and whether current trends are sustainable. Under « Business as usual » scenario, even with high growth in the emerging world, within-country divergence will prevail. Other pathways are possible however: if all countries adopt a European inequality pathway by implementing policies such as progressive taxation, a transparent global financial registry and equal access to education and well-paying jobs, then global inequality would decrease by 2050.
This Academic Seminar was co-organized by the French Centre for Research on Contemporary China (CEFC), HKUST Institute for Emerging Market Studies and Division of Social Science, Hong Kong University of Science and Technology.
Access the 2018 WIR report here.
Live Broadcast
Lucas' presentation slides can be found here http://wir2018.wid.world/files/download/wir-presentation.pdf
Li's presentation slides can be found here
About the Speakers
Lucas is Co-Director of the World Inequality Lab and of WID.world at the Paris Scool of Economics (PSE). He was general coordinator of the World Inequality Report 2018. He is also a Senior Research Fellow at the Institute for Sustainable Development and International Relations (IDDRI) and Lecturer at Sciences Po.
Li Yang is a postdoctoral researcher at the Paris School of Economics and research fellow at World Wealth and Income Database (WID). His research focuses on China’s wealth and income inequality, economic development and economic history of China.
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