Household income mobility in China and its decomposition

Using the data from the China Health and Nutrition Survey (CHNS), we measured the income mobility of households in China from 1989 to 2000. The results are decomposed into three sources: exchange, growth, and dispersion. These results show that the household income mobility in China remained at a high level from 1989 to 2000, which is due to an exchange process accompanied by high growth. Tracing the history of macroeconomic policy in China, we found that the mode of income mobility is closely associated with these policies when the time lag is taken into account.