Group-Based Income Inequality in Hong Kong: An Analysis of Mainland Chinese Immigrants
Despite serious wealth disparity in Hong Kong, public discussion about this is limited mainly to overall trends, owing partially to a lack of fine-grained data, especially on socially relevant inequality dimensions.
A study by Dr Mathew Wong Yee-hang, Assistant Professor at the Department of Social Sciences, The Education University of Hong Kong, used census surveys from 1991 to 2016 to create a novel “group-based inequality data set (GID)”, with indices of the inequality between and within groups. The primary rationale behind this focus is the gradual change in the profile of mainland immigrants, who are no longer solely low-skilled people dependent on welfare, but now include a sizable group of wealthy and educated elite, who came to Hong Kong through new immigration schemes and who are regarded as having contributed to the rise in property prices.
The study found that immigrants are becoming more diverse as they grow in size, with different political orientations. In 1991, 81% of inequality came from the distribution within each social group; this peaked at 93% in 2016.
There was a remarkably stable inequality level for Hong Kong-born Chinese households (locals) over 25 years. The policy and economic factors of the group-based inequality patterns include immigration schemes to attract talent and investors, allowing mainland graduates from local universities to work in Hong Kong, and changes in the property market.
The study found that generally, locals and other Chinese became gradually more unequal over 20 years, new and mid-term immigrants remained quite homogeneous in terms of income distribution, and long-term immigrants were in the middle. Some more recent immigrants were highly educated and/or had high incomes, which exacerbated inequality in immigrant groups. There was a sudden surge in inequality among new immigrants in 2016, which created a new dimension of inequality in society. New immigrant households remained the most unequal major social group in Hong Kong. The income profile of long-term immigrants was most similar to that of locals, followed by the mid-term group. New immigrants and other Chinese demonstrated a sharp rise in within-group income dispersion in the past two decades.
Regarding housing, the study found that new, wealthier immigrants also suffered from increasingly unaffordable housing, and that none of the immigrant groups had increased their homeownership levels.
The study concluded that (1) the successful integration of immigrants is crucial for maintaining social harmony, but there is a lack of collective discussion on their contribution to certain social problems; (2) there is a disparity between overall mainland Chinese immigrants and locals, which has led to social tension; and (3) the exacerbating inequality resulting from the diversity in economic capacity of mainland immigrant groups arriving at different time periods under various policy schemes may further hinder integration with locals and create a new boundaries and discrimination among the immigrants themselves.
If discrimination against certain social groups has an economic origin, these findings can provide empirical evidence for targeted policies to reduce bias and improve the quality of life of immigrants.
The study was co-conducted with Dr Wan Kin-man from the City University of Hong Kong. To learn more about it, please click here.