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Economy Growth, Income Differentiation And Risk Sharing Ability

Posted on:2016-10-30Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z ZhangFull Text:PDF
GTID:1109330470982596Subject:Finance
Abstract/Summary:PDF Full Text Request
After China’s Economy Reform, China has experienced a high-speed growing period and accompanying mature of market economy system and improving of people’s lives. But recent nature disasters and other social phenomenon have attracted attentions of households’ risk sharing abilities. Meanwhile, phenomenon regarding flaunt wealth and “Fuerdai”(offsprings from wealthy family) make the society rethink its policy of income distribution. This paper will unfold from the perspective of risk sharing ability and conduct researches of risk sharing ability, income differentiation and their connections under the background of fast economy development.Chapter 1: Introduction. Chapter 1 introduces the backgrounds and meanings of this paper and fully illustrates the methods. Given that empirical method is the key to this research, Chapter 1 full illustrates the two databases, China Nutrition and Health Survey and Urban Household Survey, and introduces the organizations of equations and symbols.Chapter 2: Literature Review. Chapter 2 organized main literature about risk sharing ability, factors on risk sharing ability and representative empirical research. Also, Chapter 2 summarizes traditional and novel measurement of income inequality, theories of changes of income inequality and empirical researches based on China data. Chapter 2 introduces the theoretical connection between income differentiation and risk sharing ability.Chapter 3: International Experience of Risk Sharing Ability Considering Income Differentiation. Chapter 3 analyzes risk sharing systems of retirement risk and medication expenses of U.S, U.K, German and Japan. After finding out the tendency of future development, Chapter 3 summarizes the international experience of building a proper risk sharing systems.Chapter 4: Empirical Test of Risk Sharing Ability. Based on Permanent Income Hypothesis, this paper uses CHNS(from 1991 to 2011) and UHS(from 2002 to 2009) to empirically analyze risk sharing ability of households. Based on full insurance hypothesis and partial insurance hypothesis, this paper finds evidence that only 30% of households’ risks can be shared, among which 4% of total risk is considered as permanent income shocks and 26% is considered as temporary income shocks. If the interval of investigation is enlarged from 1 year to 3 years, then 50% of total risk can be insured.Chapter 5: Income Differentiation and Meanwhile, this paper investigates the Income Differentiation happened in China using both traditional Gini Index and novel Polarization Index. Gini Index increases 17% in CHNS database and 7% in UHS database. DER polarization index increases 4.7% in CHNS database and 2.4% in UHS database. The results indicate that income differentiation becomes more severe, and that polarization is less severe than inequality because of its consideration of density of income groups. The reasons behind the growth of income differentiation are the increase of capital income, the solidation of social classes, the differentiation between provinces and the differentiation of educations. Among them, the capital income increases 3% in percentage term and enlarged its effects of increasing income inequality. People born from the same period suffered from enlarged income inequality once they reach 40 years old. Spatial inequality accounts for nearly 90% of total inequality, which difference of education attributes 10%.Chapter 6: Risk Sharing Ability and Income Differentiation under the Background of Economy Growth. Percentile income grouping, average propensity to consume and income group liquidy are used to analyze the effects of income differentiation on risk sharing ability. This paper finds out that income differentiation drives households to lower income groups and reduces the ability of education investment, therefore damages the risk sharing ability.Chapter 7: Conclusions. Chapter 7 summarizes the risk sharing ability and its influence factors. After carefully investigated the risk sharing system of United States, United Kingdoms, German and Japan, this paper proposes several methods to improve social security systems of China and risk sharing abilities of Chinese households: promote education equality and modify tax systems so as to reduce the negative effects of income differentiation and avoid income fluctuation; build a balanced “Three Pillar” pension systems; increase the coverage of social medication insurance and the level of payment; make special policies for special groups; introduce commercial insurance into current system without harming the positive effects of government transfer payment.The main contributions of this paper including: conduct empirical analysis of risk sharing ability of households based on full insurance hypothesis and partial insurance hypothesis, among which PIH is used first time considering China data; use micro data and several measurements to quantitively analyze income inequality and polarization; use representative provincial data to investigate the component of income equality; analyze the effects of income differentiation on risk sharing ability; summarize the risk sharing systems of developed countries and then make suggestions of improving China Household risk sharing ability.
Keywords/Search Tags:Risk Sharing Ability, Income Differentiation, Full Insurance Hypothesis, Partial Insurance Hypothesis, Income Polarization
PDF Full Text Request
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