Family Changes and Income Inequality under Globalization

The development of an urban locale as a global city has been regarded in the literature on urban development as a critical determinant of growing social polarization. I re-examine this thesis by using the case of Hong Kong, which has attained the status of a major global city because of the development of producer and financial services that has resulted from the acceleration of globalization. While showing that the Hong Kong experience largely supports the polarization thesis as indicated by widening occupational and income polarization, I also introduce a socio-demographic dimension into the analysis. I argue that income disparity at the individual level is also reflected at the household level through different patterns of family formation and household employment strategies. To substantiate this argument, I use data from the Hong Kong Population Censuses to analyse trends in household income inequality between 1991 and 2001, a period of heightened globalization in Hong Kong. By decomposing aggregate income inequality and isolating the contribution of husbands and wives and different types of households, this paper puts into sharp relief the ways in which local and socio-demographic factors mediate the economic processes of globalization.