The Multipath Measurement And Evaluation In The Influence Of China’s Industry Income Gap On Economic Growth

Since the reform and opening up, especially after the 1990 s, China’s economy has sustained rapid growth. In the process of rapid economic growth, with the overall population income levels rising, increasing inequality in income distribution has become an unarguable fact. The widening industry income gap is its important factor. Data shows that in China’s all industries the Ratio of the average income beteen the highest income industries and lowest income industries was 2.17 in 1978. By 2004 this ratio reached 4.25, starting to break 4. By 2014, this gap was 5.69. Although during this time in different years the industry income gap ups and downs, but overall showes an upward trend.On this subject of income distribution, throughout the relevant researches at home and abroad, many scholars from different perspectives investigate and demonstrate the relationship between income gap and economic growth.In terms of China’s relevant studies, previous studies more concernes about the overall income distribution, the income gap between urban and rural areas and between regions impacting on economic growth, but they give less attention to the relationship between industry income gap and economic growth. Current studies are mainly focused on the measurement and influencing factors of industry income gap and so on They lack of systematic research on the path and mechanism of the impact of the industry income gap on economic growth. So, from both theory and practical point, based on the fact of china’s industry income gap expanding, researching relationship between industry income gap and economic growth undoubtedly has a strong theoretical and practical significance.Based on the above considerations, the paper researches the current status of the industry income gap as a starting point, and along research ideas of the theoretical analysis- discovering mechanism- empirical researching- policy designing researches the relationship between the industry income gap and economic growth Firstly, through theoretical discussion to the impact of the industry income gap on economic growth, the paper determines the internal mechanism. Then using China’s 1985- 2013 time series data, based on five intermediate factors of labor input, capital investment, labor productivity and capital productivity and consumer demand, the paper tests the specific effects of industry income gap on economic growth, and finally combining theoretical and empirical researches, puts forward relevant policy recommendations.Specifically, the article is mainly composed of eight chapters. In addition to the chapter 1, the remaining seven chapters can be divided into four parts: the first part includes the chapter 2 and the second part includes chapter 3 to chapter 6; then the chapter 7 and chapter 8 respectively constitute the third and fourth part of this article. Among them, the chapter 2 is the theoretical basis of the entire article. In this chapter we determine the theoretical mechanism that industry income gap impacting on the economic growth indirectly through some intermediate factors. At the same time, on the help of analyzing the present situation of industry, this chapter determines the conduction mechanism and the role of industry income gap affecting economic growth path based on the relationship of them. We believe that the influence of industry income gap on economic growth is indirect. So a new analysis framework is put forward that industry income gap impacting on economic growth through some indirect factors such as the labor input, capital input, labor productivity, capital productivity and consumption.The chapter 3 to the chapter 6 is the second important part of this article. Of this part, the relationship between these factors and the income gap is studied from the theoretical and empirical angle. Among them, the chapter 3 includes two parts: on the one hand, it carries a quantitative calculation on the income gap of our country industry, which builds a foundation for the later; on the other hand, it examines the relationship between industry income gap and the input of capital and labor from the perspective of theory and practice. And based on China’s 1985-2013 time series data and by using the method of co-integration, this chapter determines that the industry income gap has a positive influence on the capital investment and the negative influence on the labor input. Further, it also shows that this influence appearing through the industry average salary and savings respectively. The chapter 4 and 5 is about the relationship between the industry income gap and capital productivity and labor productivity. After determining the theoretical mechanism of the industry income gap influences on the capital productivity and labor productivity, the empirical results show that the industry income gap has a positive correlation with capital productivity and labor productivity. This means that industry income gap is helpful for the improvement of the capital productivity and labor productivity from the current situation, and industry income gap influences on the capital productivity through scientific and technological progress. In chapter 6, it studies the relationship between the industry income gap and consumption demand, based on the transmission path of from income gap to residents’ income gap, then to the consumer demand. Among them,the state space model is used when it studies the relationship between the residents’ income gap and consumption demand. The final estimated results show that the widen of industry income gap is unfavorable to the growth of consumer demand.The chapter 7 is the third important part. In this chapter, it determines the relationship between the economic growth and some mediate factors such as capital and labor, capital productivity and labor productivity and consumer demand. Meanwhile, it also measures the overall effect of industry income gap on economic growth comprehensively. The results is showed that on the one hand both the improvement of productivity and the increase of consumer demand can promote economic growth, on the other hand the industry income gap is positively related to the economic growth, combined with the measured results of the foregoing chapters. This means that industry income gap is conducive to economic growth from the present situation of China.The chapter 8 is the conclusion part. It summarizes the contents and conclusions of the above chapters. Then some corresponding measures and suggestions are put forward on the basis of them.Overall, through the systematic discussion and analysis about the path and mechanism of industry income gap influencing on economic growth, and through the comprehensive inspection and quantitative measure about the industry income gap influencing on economic growth by various paths, it deepens the understanding of industry income gap affecting on economic growth and provides valuable references for perfecting the income distribution system and further improving the economic growth.