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https://doi.org/10.1080/1331677X.2022.2091633

Income inequality and human capital allocation

Jiaju Yu
Ye Xu

Sažetak

This study discusses the relationship between income inequality
and human capital allocation in China. We categorise income
inequality into intersectoral (state- versus non-state owned) and
intergenerational income inequality. Based on relevant theoretical
assumptions and empirical tests using existing regional data, we
find that income inequality influences regional human capital allocation
in China in three ways. First, intersectoral income inequality
has a negative impact on regional human capital mismatch (i.e.,
inconsistency between job skill requirements and workers’ actual
skills). Second, intergenerational income inequality positively
affects regional human capital mismatch. Third, the interaction of
intersectoral and intergenerational income inequality has a negative
impact on human capital mismatch. Thus, we observe differences
in the net impact of intersectoral and intergenerational
income inequality on human capital mismatch in China. The net
impact of intersectoral income inequality on human capital mismatch
is persistently negative, while the impact of intergenerational
income inequality on human capital mismatch is
contingent upon the degree of regional intersectoral income
inequality. However, the imbalance in China’s regional development
creates discrepancies in the relationship between improvement
in income equality across regions and optimisation of
human capital allocation. Thus, the process of formulating relevant
policies must be regional, long-term based, and phased.

Ključne riječi

Income inequality; human capital allocation; human capital mismatch; intersectoral income inequality; intergenerational income inequality

Hrčak ID:

304183

URI

https://hrcak.srce.hr/304183

Datum izdavanja:

31.3.2023.

Posjeta: 543 *