Beyond Divergence: Socioeconomic Status and Perceived Income Inequality in China

Past research has been divergent about perceived income inequality among diversely positioned members of the Chinese population. Several scholars have suggested that persistent earnings disparity results in societal unrest while others claim that most Chinese citizens view existing disparities as relatively reasonable. In this dissertation I argue that individuals with different socioeconomic status possess different perceptions of income inequality which reflect differences in legitimating income inequality and wealth rearrangement preferences. Implementing the survey data from the China General Social Survey (CGSS), I developed a new measurement of perceived earnings disparity and a Structural Equation Model (SEM) to analyze perceived earnings disparity among the Chinese population. This analysis is integrated with psychological and cultural approaches in order to understand why it is that Chinese people seem relatively unresponsive to persistent income inequality. Results show that: (1) People with high socioeconomic status believe that income inequality is the normal result of competition in the market economy and those with low socioeconomic status tolerate income inequality for government’s good economic performance; (2) socioeconomic status differentials in perceived income inequality diverge as higher earnings disparity becomes evident in contemporary China; and (3) the people within the lowest economic strata are sensitive to the intensified income inequality, and have stronger demands for redistributive policies while those in the highest strata express attitudes that suggest indifference to this issue. The divergence in perceptions of income inequality and redistributive preferences between people from the elite and the bottom can be seen as a sign of social as well as economic polarization in Chinese society. The research partly supports the existing statement that the members in privileged group turn into oligarch while those in disadvantaged group are amenable to populist expressions. The policy implication is that the government should implement an institutional approach to solve the persistent income inequality