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Income Inequality among Old Chinese
Katja Hanewald, Ruo Jia, Zining Liu, Oct 16, 2019Using data from the China Health and Nutrition Survey (CHNS) from 1991–2015, we decompose the income inequality among old Chinese and compare the income inequality between old households and young households. We develop an OLG model and a new empirical method to test how initial socioeconomic differences transmit to income inequality in the working years and then in old age. We find that the urban-rural gap and educational differences...
Debt Management and Strategic Interactions in Top-down Bureaucracy: Evidence from China
Xi Qu, Zhiwei Xu, Jinxiang Yu, Apr 30, 2025The Chinese central government implemented a series of measures to establish a top-to-bottom debt ceiling management system starting in 2015. Under this regulatory framework, public debt issuance for a prefecture city is subject to a ceiling (quota) determined through a hierarchical procedure. Based on a comprehensive dataset, we investigate what factors determine the allocations of debt ceiling to prefectural cities in China after the debt management reform. We find that the distributional outcome of the debt ceilings relies on the bilateral interactions of local and their superior governments. We also estimate the effect of ceiling allocation on the real economy, as well as the potential risk associated with implicit debt accumulation.
Does Spatial Misallocation in China’s Housing and Land Markets Drive Up Housing Prices?
Yongheng Deng, Yang Tang, Ping Wang, Jing Wu, Mar 23, 2022We documented pervasive spatial misallocations in the housing and land markets in China. We find larger cities with more competitive land markets and strict land supply restrictions have fewer subsidies in housing sales, and consequently a higher housing price compared to its frictionless benchmark. Removing frictions brings welfare gain because more individuals live in larger cities.
Industrial Clusters, Networks, and Resilience of Firms to the Covid-19 Shock in China
Ruochen Dai, Dilip Mookherjee, Yingyue Quan, Xiaobo Zhang, Jan 06, 2021Both entry of new firms and performance of incumbents were less adversely affected by the Covid-19 shock in Chinese counties with a greater presence of industrial clusters. To explain these results, we find evidence of the role of two specific attributes of clusters: reliance on informal hometown-based entrepreneur networks and spatial proximity to suppliers and customers.
The “Trusted-assistant” Loan in Nineteenth Century China
Meng Miao, Guanjie Niu, Thomas Noe, Nov 08, 2017In this paper, we analyze “trusted-assistant loans,” which were loans issued (typically) by Shanxi Banks during the Qing period to finance newly appointed scholar-officials. Even though creditors lacked legal rights and, in fact, lacked every repayment enforcement mechanism advanced by economic contract theory, repayment rates on these loans were relatively high and they constituted a large and profitable portion of many banks’ loan portfolios. This paper develops a theory of “resource-based” debt contract enforcement that rationalizes repayment and tests the hypothesis of this theory using data from scholar-officials’ diaries and nineteenth century Chinese bank records.
