SOCIAL INEQUALITY AND MOBILITY

IN HONG KONG:
FINDINGS FROM A BENCHMARK SURVEY, 2007

Xiaogang WU
(吴晓刚)
Associate Professor
Social Science Division
Hong Kong University of Science & Technology

Nov 6, 2009
1. BACKGROUND OF RESEARCH ON INEQUALITY
 Rising inequality has been a pressing issue faced by
many countries in recent decades. It is economic,
social, and political issue that deserves research from
all major social science disciplines.
 Sociological research on inequality considers
hierarchical social structures that rank people with
respect to access to certain resources, and how such
structure/pattern varies in different context.
 Research on class inequality and mobility: WHO
GETS WHAT, AND WHY?
 Occupation is an important basis of social
stratification, through which majority of us earn
income.
SOCIAL SCIENCE AND THE PUBLIC POLICY
 Theory-based and empirically-tested models of inequality that can
assist not only in understanding ongoing changes in inequality but
also in evaluating public policy and social interventions.
 Basis: the collection and empirical analysis of population-based
sample data .
 The case of Hong Kong: two contrasting images.
Historical Trends 1981-2006: Government Statistics

250000 0.56

200000
0.52
GDP Per Capita

Gini Coefficient
150000
0.48
100000

0.44
50000

0 0.4
1 2 3 4 5 6
Year
GDP Per Capita Gini Coefficient

Change of GDP per Capita & Gini Coefficient from 1981 to 2006 in Hong Kong
ECONOMIC DEVELOPMENT AND INCOME

INEQUALITY IN HONG KONG, 1981-2006

Year GDP Per Capita (at current Gini Coefficient

market price HK $)*
1981 33369 0.451
1986 57784 0.453
1991 120015 0.476
1996 191047 0.518
2001 193500 0.525
2006 215158 0.535
Comparative Income Inequality: the Case of Hong Kong

Sierra Leone
Ctrl African
Nicaragua Brazil
.6

S. Africa
Paraguay
ColombiaChile
Honduras
Lesotho
Guatemala
Burkina Faso

Zambia Mexico
El Salvador Hong Kong
P. N. Guinea
Nigeria
Niger
Mali
.5

Zimbabwe
Venezuela
Malaysia
Russian
Panama
Cameroon
Dominican
Philippines
PeruCosta Rica
Kenya
Uzbekistan
Bolivia
Armenia
Ecuador
BurundiUruguay
Tunisia
Turkey
Thailand
Senegal
Turkmenistan
Ghana US
.4

Cambodia
Guinea
China
Ethiopia
Mozambique
Morocco
Madagascar
Israel Jamaica
India Estonia
Uganda
Mauritania
Georgia
Lao
Nepal
Cote d'Ivoire
Jordan UK
Vietnam
Azerbaijan Ireland
Portugal
Kazakhstan
Algeria Australia
Tajikistan
Kyrgyz
Sri Lanka
Bangladesh
Yemen
Mongolia Switzerland
Lithuania
Latvia Greece Spain France
Netherlands
Indonesia Poland
Korea
Pakistan Canada
Romania Austria
.3

Germany
Ukraine
Rwanda
Egypt Croatia Belgium
Slovenia
Italy
Bulgaria
Czech Finland Norway
Sweden
Denmark Japan
Hungary

Belarus
.2

Slovak

0 10000 20000 30000 40000

GDP Per Capita (US$)
2. HONG KONG’S INEQUALITY IN POLICY DEBATE
 Inequality has become a political issue (high Gini
coefficient is often cited as evidence).
 The government set up a new Commission on
Poverty in 2005 to tackle the problems related to
poverty, among which inter-generational transfer of
poverty was listed on the top of the Commission’s
policy.
 Stagnant social mobility and the emergence of M-
shape society.
 SOCIAL MOBILITY
 Some argued that in the context of economic
recession and industrial restructuring, Hong
Kong is increasingly polarized, fitting the
scenario of the M-shaped societies.
 Others contended that little statistical evidence
suggests such an ongoing trend, namely,
ordinary people’s living standards are on the
decline and social mobility is blocked.
 THE CHIEF EXECUTIVE’S POLICY ADDRESS 2009

 TEMPORAL TRENDS IN SOCIAL MOBILITY
 Intergenerational or intergenerational mobility;

 How structural change shapes opportunities;

 Therole of educational expansion in affecting the

pattern of social mobility.

 Evidence
from the Census and By-census Data,
1981-2006.
INDUSTRIAL RESTRUCTURING

100%

80%

60%

40%

20%

0%
1981 1986 1991 1996 2001 2006
Year

Manufacture Construction
Wholesale/retail/trade Transport/communication
Finance/real estate Community/social service

Industry composition change from 1981 to 2006 in Hong Kong

OCCUPATIONAL CHANGE

100%

80%

60%

40%

20%

0%
1981 1986 1991 1996 2001 2006
Year
Managers Professional
Associate professional Clerk
Service/sales Craft worker
Machine operator/assembler Elementary occupation

Occupation Change from 1981 to 2006 in Hong Kong

EDUCATIONAL EXPANSION

100%

80%

60%

40%

20%

0%
1981 1986 1991 1996 2001 2006
Year
Primary or below Lower secondary Upper secondary
Non-degree Degree or above

Overall Education Change in Hong Kong

3. SOCIAL INEQUALITY AND SOCIAL MOBILITY:
A BENCHMARK SURVEY
 Public policy research: data as the basis, and methodology as the
arbitrator.
 Funded by the CPU Public Policy Research Fund (1st).
 Large sample size (N=4013)
 Representative: a 2-stage stratified replicated sampling design
for the survey. To make the data representative of the general
population, a weight is created based on the official statistics in
terms of sex, age, education, and household size from the 2006
Hong Kong by-census data
 Comprehensive: covers various topics related to social
stratification and mobility, both objective and subjective ones.
 Benchmark to monitor changes.
OCCUPATION
 Occupation: Narrative descriptions of the job for respondent at different
time, the respondent’s father, have been coded to 3-digit ISCO88 occupation
categories. 9 categories collapsed into 6 in analysis
 Census categories Monthly Mean years
earnings of schooling
Manager/professional 1 managers/administrator 27951 15.8
2. Professional
Associate professional 3. Associate Professional 19709 14.2
Clerk 4. Clerks 12240 12.9
Service worker 5. Service Workers and Shop 11139 11.0
Sales Workers
Skilled worker 6. Skilled Agricultural and 11187 9.6
Fishery Workers
7. Craft and Related workers
Unskilled worker 8. Plant and Machine 7765 8.5
Operators and Assembler
9. Elementary Occupation
INTER-GENERATIONAL AND INTRA-GENERATIONAL MOBILITY

Father’s Occupation
Intergenerational I II III IV V VI Total
I. 36.54 14.18 21.17 13.63 14.39 15.34 18.64
Manager/professional
II. Associate 14.78 24.15 13.41 10.20 13.40 8.33 12.70
professional
III. Clerk 25.91 28.49 38.65 33.73 24.32 25.23 26.83
IV. Service worker 12.31 17.54 13.90 24.15 16.46 18.30 16.94
V. Skilled worker 6.04 11.78 5.19 9.72 17.65 19.19 14.14
VI Unskilled worker 4.42 3.86 7.68 8.57 13.78 13.61 10.75
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Intra-generational First Occupation

I. 89.01 16.96 10.14 8.83 7.11 3.71 19.66
Manager/professional
II. Associate 4.21 69.26 7.95 7.09 7.39 5.87 12.58
professional
III. Clerk 2.07 7.24 67.13 13.87 4.38 10.45 25.47
IV. Service worker 3.32 4.67 9.96 54.54 11.80 12.32 17.82
V. Skilled worker 0.60 0.76 2.72 8.61 49.02 20.08 14.02
VI Unskilled worker 0.78 1.10 2.10 7.06 20.31 47.57 10.45
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00
TRENDS IN OCCUPATIONAL MOBILITY IN HONG KONG,
BY BIRTH COHORT
Overall 1946-1955 1956-1965 1966-1975 1976-1989
Current Occupation
Manager/professional 19.28 17.85 20.56 21.74 16.02
Associate professional 12.56 10.87 12.01 11.89 14.42
Clerk 25.21 10.41 17.46 26.77 36.41
Service worker 17.67 14.19 16.60 17.63 20.02
Skilled worker 14.30 21.12 20.37 12.43 8.00
Unskilled worker 10.99 25.55 13.01 9.53 5.12

Father’s Occupation
Manager/professional 17.06 18.59 15.89 14.89 19.77
Associate professional 4.74 2.33 4.42 4.70 5.86
Clerk 5.35 2.73 4.18 6.13 6.48
Service worker 11.49 9.52 10.27 12.35 12.38
Skilled worker 40.13 45.98 42.36 39.82 36.51
Unskilled worker 21.23 20.85 22.88 22.11 19.00
Total mobility rate 0.78 0.72 0.73 0.78 0.83

First Occupation
Manager/professional 13.09 13.68 12.22 13.13 13.63
Associate professional 9.11 7.16 7.86 8.95 11.15
Clerk 29.88 15.60 22.34 33.97 37.96
Service worker 19.38 12.43 16.40 20.76 23.30
Skilled worker 19.55 35.09 31.81 15.20 6.90
Unskilled worker 9.00 16.05 9.36 7.99 7.06
Total mobility rate 0.38 0.45 0.42 0.40 0.28
 MOBILITY RATES BY COHORT

0.8

0.7
mobility rate

0.6

0.5

0.4

0.3

0.2
1946-1955 1956-1965 1966-1975 1976-1989
Year
inter-generational intra-generational

mobility rate change for intra-generational & inter-generational

EDUCATIONAL EXPANSION BY COHORT

Overall 1946-1955 1956-1965 1966-1975 1976-1989

Education:
Primary 7.80 24.97 13.47 3.53 0.53
Lower secondary 11.76 20.02 16.50 11.70 4.27
Upper secondary 28.72 28.03 27.84 31.93 26.40
Non-degree 20.73 12.60 16.22 23.37 25.24
Degree 30.99 14.38 25.98 29.46 43.56

Implication for occupational structure

Mobility into Managerial/Professional, Associate
Professionals, Clerks

40

35

30

25

20

15

10

0
1946-1955 1956-1965 1966-1975 1976-1989

M anager/professional Associate professional Clerk

MOBILITY INTO SERVICE, SKILLED AND
UNSKILLED WORKERS
30

25

20

15

10

0
1946-1955 1956-1965 1966-1975 1976-1989

Service worker Skilled worker Unskilled worker

4. BECOMING MIDDLE CLASS
 Operational definition: managers/professional, and
associate professional (yes=1).
 Independent variables:
 education (secondary or below, tertiary non-degree, and
tertiary degree)
 Cohort (1946-1955 1956-1965 1966-1975 1976-1989)
 Sex (male=1)
 Immigrant (whether born in HK)
 Living in public housing at age 14 (yes=1).
LOGIT MODELS PREDICTING THE LIKELIHOOD OF
ATTAINMENT OF MIDDLE-CLASS IN HONG KONG
Model 1 Model 2
Education [secondary below omitted]
Non-degree tertiary 1.32 *** 1.97 ***
(0.14) (0.35)
Degree or above tertiary 2.84 *** 3.43 ***
(0.14) (0.49)
Male 0.35 ** 0.35 **
(0.11) (0.11)
Immigrant -0.24 -0.23
(0.13) (0.14)
Living in Public housing at age 14 -0.23 * -0.24 *
(0.12) (0.12)
Cohort [1946-1955 omitted]
1956-1965 -0.16 0.00
(0.17) (0.23)
1966-1975 -0.29 -0.04
(0.18) (0.25)
1976-1989 -0.90 *** -0.22
(0.19) (0.30)
Interaction
1956-1965*non-degree tertiary - -0.59
(0.43)
1956-1965* degree tertiary - -0.82
(0.43)
1966-1975*non-degree tertiary - -1.18 *
(0.47)
1966-1975*degree tertiary - -0.50
(0.55)
1976-1989*non-degree tertiary - -0.56 *
(0.55)
1976-1989*degree tertiary - -1.20 *
(0.56)
Constant -1.93 *** -2.13 ***
(0.18) (0.21)
FINDINGS
 The importance of education in becoming middle class;
 Younger cohort (1976-1989) has significantly less chance
of mobility into middle class;
 Men are more likely than women to become middle class

 Those from poor family background (living in public

housing at age 14) are less likely to move into middle
class, even net of education.
 Interaction terms suggest that young cohorts who
received tertiary education had less chance to become
middle class than their older counterparts.
SUMMARY AND CONCLUSIONS
 Economic transformation/restructuring has led to a
decline in job opportunities in manufacturing sector,
and skilled and unskilled workers, and the growth in
service/sales jobs.
 The expansion of tertiary education but limited
professional/managerial jobs has led to the inflation of
clerk jobs, many of which are filled by tertiary school
graduates, who would be almost guaranteed
professional and managerial jobs in the past years.
 In other words, tertiary graduates are increasingly
less likely to make into managerial/professional and
associate professional jobs.
 Living in public housing at age 14, and immigrant
status also affect the chance of becoming middle class.
SUMMARY AND CONCLUSIONS
 Despite the fact said above, there is a very high rate
of intergenerational mobility in HK, including both
upward and downward mobility;
 The rate of intra-generational mobility across
occupational class has been very limited in Hong
Kong, particularly for the youngest cohort, though it
is may be due to the life course effect (it takes some
time).
 High inequality may coexist with high mobility.
 While education serves as an important avenue for
an individual’s upward social mobility, it provides
little help to address the overall inequality at the
society level.
HONG KONG PANEL STUDY OF SOCIAL DYNAMICS
(HK-PSSD, 2009-2014)

香港社会动态追踪调查

Strategic Public Policy Research

VISION
 Building an important infra-structure for social science
research in Hong Kong.

 Facilitating comparative study of Chinese societies

(Taiwan, Hong Kong, and Mainland [or selected regions,
Shanghai, Beijing, Guangdong]).

 Training next generation of survey/quantitative social

scientists in the region of Great China;
MISSION
 To establish the first-ever household panel for data
collection at both household and individual levels in
Hong Kong.

 Totrack socioeconomic changes and their impact on

people’s life, and provide an empirical basis for public
policy formation to address social problems in Hong
Kong.

a long-time project: 2-wave surveys within the first-

five years (2009-2014); will seek funding beyond 2014.
PUBLIC POLICY IMPLICATION
 Panel data are particularly useful in identifying
causes of social problems for policy intervention.
The first panel data collection of this kind (PSID
since 1968 housed at Michigan) was indeed
originated from U.S. War on Poverty in 1960s.

 HK-PSSD is population-based representative

survey, including but not being limited to topics
on poverty/inequality and families in Hong
Kong.

 The panel data will become a comprehensive

vehicle for many economic and social research
related to public policy in Hong Kong.
TOPICS FOR POLICY ANALYSIS
 Income and poverty dynamics;
 Intergenerational studies;

 Socioeconomic inequality;

 Child development;

 Fertility, marriage and migration;

 Family and subjective wellbeing;

 Retirement and aging.

 And among others.

THANK YOU!

CENTER FOR APPLIED SOCIAL AND ECONOMIC RESEARCH

(CASER)
HONG KONG UNIVERSITY OF SCIENCE & TECHNOLOGY

For Inquiry:
Tel: 23585875
Email: info@caser.ust.hk