Abstract
ABSTRACTUnreported income is an important factor that distorts China’s household income accounting and Gini coefficient calculation. On the basis of comparing NBS household survey data and data from China’s Cash Flow Statement, this paper estimates the size and structure of unreported income in China over recent years. Our study found that about 20% of household disposable income has not been covered by existing household surveys in recent years. In 2015, the omission rate was 19.5%. Operating income and property income have the highest omission rates. Considering that unreported income is primarily owned by high-income people, China’s falling Gini coefficient since 2009 may have resulted from the statistical omission of partial incomes of high-income group. If unreported income is re-included, China’s Gini coefficient would increase by 10 percentage points rather than decrease.
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