Understanding wealth and housing inequality among China’s older population

Abstract

In this article we study wealth inequality of China’s older population aged 45 and older using data from the 2011 national baseline of the China Health and Retirement Longitudinal Study (CHARLS). As housing wealth accounts for the lion’s share of household wealth in China, we provide detailed analysis of housing wealth differences in China, including an assessment of the importance of housing windfalls associated with housing reforms in the 1990s and market price increases for housing. Our calculations indicate that in 2010, the wealth Gini coefficient is 0.69, and the wealthiest 20% of the population account for about three-quarters of total wealth while the bottom 50% account for only 5.73% of total wealth. We show that the majority of today’s wealth is the result of windfall gains, especially rapid increases in housing prices.