Study Of Influencing Factors Of The Transition Of China's Personal Income Differences

The features of personal income distribution are different in different countries and regions at each stage of development. In current period of economic transformation in our country, income disparities inevitably widen with the putting forward of the market reform. New data released by the World Bank suggested that the Gini coefficient of personal income had exceeded the warning line of 0.4 since 1997 and reached 0.47 in 2007. It is a fact that the income disparities in China have been so large that they need to be controlled. The purpose of this dissertation is to study on how to achieve the overall goal of the socialist market economy and decrease the difference of income, to make people share the yields of reform and opening up, and to promote the construction of a harmonious socialist society.If we want to control and make better the problem of income inequality, we must understand the cause of income disparities, analyze the interactions between inequality and some influencing factors, make clear the primary reasons for income disparity and dissert the measures to promote the sustainable development of the economy and to decrease the income disparity at one time. Researchers discovered that besides human capital, social capital, which represents the ability of utilizing social resource, is also a significant factor influencing personal income. In this light, this dissertation focuses on the following studies:Firstly, this dissertation analyzes the current factors influencing the income disparity in our country. Based on related literature, this dissertation firstly sums up the factors as human capital and social capital, and then defines human capital and social capital under the circumstances of our country and considering the need of the study. It mainly dissertates the mechanism of those two factors influencing the income inequality, analyzing how those factors cause income disparity through job hunting, promoting and efficiency of working and distinguishing which parts of income difference are unavoidable cost and which parts can be reduced through perfecting the policy and system, so as to provide theoretical and practical bases for making the related policy proposals more targeted and operative.Secondly, this dissertation analyzes the extent to which human capital and social capital influence income disparity. Using Chinese household survey data, this empirical study investigates to which degree these factors can increase income and what are the disciplines. The differences of those factors affecting income between cohorts of different ages, genders and registered residences are also studied.Thirdly, this dissertation decomposes the inequality by factors and analyzes the trends. In this paper, I analyze each factor's contribution to income disparity, compare the effect of human capital and social capital on income disparity, and judge which factor is currently the primary one inducing income disparity. I also do research on the discipline of those factors affecting the change of income disparity.Fourthly, this dissertation does research on the modes of reducing income disparity. Based on the results of the empirical study, this dissertation studies the feasible modes of reducing income difference, comparing the advantages and disadvantages and balancing the social and economic costs of those modes, and puts forward rational suggestions on reducing income difference.Accordingly, I divide the article into seven chapters. In chapter 1, there is a presentation of the study background and methods, getting related theoretical documents into shape, laying a basis for the whole research. Chapter 2 discourses the reasons for human capital factors to influence income disparity, analyzes the influence mechanisms particularly and states the related theory. Since there is not uniform definition of social capital, chapter 3 discusses and defines social capital specially and analyzes the routes for social capital to influence income disparity. On the basis of the theoretical research, chapters 4 and 5 study empirically the extent and rules of human capital and social capital influencing income difference. Chapter 6 decomposes income disparity by human capital factor and social capital factor. And the last chapter concludes and puts forward some rational proposals.The innovation of this dissertation includes: observing the laws of change of income disparity from the integrative perspective of human capital and social capital and decomposing and comparing the effect of human capital and social capital on income difference. This paper finds that, in present China, both human capital and social capital are important factors influencing income inequality and that the effect of social capital is larger than that of human capital. The periodical comparison indicates that the effect of human capital on income disparity increases considerably. As a whole, such personal striving factors as educational level and the amount of gifts given and received have increasing influence on income difference, and such natural factors as parental social capital and the type of registered residence have decreasing influence, implying that they have the characters of the economic transformation period.