Ageing Population and Rising Income Inequality in Post-Handover Hong Kong

As reflected in the rising Gini coefficient, widening income disparity in Hong Kong in the last few decades is indisputable. The coefficient rose from 0.518 in 1996 to 0.539 in 2016. During the same period, the share of singleton households picked up gradually from 14.9 per cent in 1996 to 18.3 per cent in 2016. During the post-handover period, household composition change explained 11.0 per cent of the increase in variance of log income. Empirical evidence suggests that households with three or more members had lower income dispersion than those of singleton and two-person households. If the percentage share of small households keep increasing, the income dispersion also continues to widen. In 1996, the share of zero income singleton households stood at 0.7 per cent and the percentage share jumped to 7.2 per cent in 2016. Most of these zero-income one-persons households are retired elderly. In Hong Kong, most people lack retirement planning. The increasing number of singleton households with zero income exert tremendous financial pressure to the government. If the government does not properly address these issues, these trends could lead not only to higher income inequality but also to a serious social problem.