The Impact Of Income Inequality On Subjective Well-Being Of Chinese Populace

"How to improve the livelihood and subjective well-beings of people" are core issues of the Chinese Communist Party and government. The final goal of economic growth and public policy is to improve the people’s livelihood and subjective well-beings. However, the problems of income inequality are more and more serious during the developing process of China’s economy and society, Will the increasing income inequality affect on the residents’subjective well-beings and how to influence? At present, domestic researchers don’t study this issue systematically. In order to demonstrate the above questions scientifically, first, this dissertation analyzes the inner mechanisms of income inequality affect the residents’subjective well-beings theoretically. And then, using the higher quality of micro survey data and empirical analysis method, we test empirically the relationship between income inequality and subjective well-beings. The main content and findings are as follows:The mechanisms of income inequality affecting subjective well-beings include direct and indirect. The direct influences contain:People influenced by "what matters is not wanting but unfairness" traditional ideas were born with disgust inequality, inequality damages people’s subjective well-beings directly; Relative deprivation theory points out the increasing inequality will lead to rising relative deprivation, so as to reduce subjective well-beings; The income inequality is able to change expect and to promote income liquidity. There are two kinds of cases of expect changes, which can be explained by "tunnel effect" vividly. When the economy of around people gets better, they also have optimistic expectations on their own future, and which can improve their subjective well-beings, this is called the "positive tunnel effect". If the income inequality is too big, and people don’t still reach their expectations, the people’s optimistic expectations will disappear, instead of discontent, anger, frustration and impatience, people’s subjective well-beings will reduce, this is called "negative tunnel effect". And the indirect effect mainly refers to the income inequality will bring many social problems, such as, deterioration health, violent crime, social trust crisis and so on, all of the social problems directly affect people’s subjective well-beings.The empirical study found that the income inequality has impact on residents’ subjective well-beings significantly. Specifically, we found that there is an "inverted-U" association between income inequality and SWB, and the turning point in gini coefficient is0.4, which means that SWB increases with inequality when gini coefficient is less than0.40and decreases with inequality for larger gini coefficient. There are about63.2%areas or counties with gini coefficient larger than0.4. And the "inverted-U" relationships are robust.We also found the "inverted-U" association between urban inner income inequality and SWB, and the same to rural. However, the tolerance of urban residents is lower than rural residents; the urban internal turning point is0.314, while the rural is0.457. There is also "inverted-U" association between the urban-rural income inequality and SWB.Different people have different attitudes and feelings to inequality, and these will influence the relationship between inequality and SWB. People’s perception of the principles of distributive justice has a remarkable effect on the relationship between income inequality and SWB, people with the principle of equity are happier than those with principle of equality; and this conclusion is also applicable to city and country. The perception of distributive justice has impact on the SWB significantly. Under the same conditions, people with fair perception of distributive justice are high0.231units than those with unfair perception. But interaction effects of income inequality and perception of distributive justice on SWB don’t exist.We also examine the influence of social stability and social trust on SWB and the indirect influence of the income inequality through the social stability and social trust on the residents’ SWB. Social stability and social trust are important influence factors of SWB, and they are the indirect paths of income inequality affecting SWB, social unrest significantly reduces the residents’ SWB, social trust increases SWB; the indirect channels through social unrest and social trust account for about5.4%and5.4%of the total effect, the direct effect accounts for84%.Using the world values survey data, we also analyze the dynamic changes of income inequality affecting on SWB during the China’s economic and social transformation process. Using the ordered probit model and the expansion of Oaxaca-decomposition method, we found:the average level of residents’SWB in China improved from2001to2007, but the distribution of SWB are more extreme, the proportion of "very happy" and "very unhappy" both increased significantly; the influence of income inequality on SWB over the six years experiences a qualitative change, income inequality can significantly improve SWB in2001, but reduce in2007. Whether the change of the income inequality or the change of coefficient which income inequality affects on SWB, all the changes is the factor of reduction of the average level of SWB, and the influence of the change of coefficient is very large.Finally, we use the regression-based decomposition based on Shapley value to study the determinants of wage gap in urban labor market and income inequality in country. And we also investigate the contribution of all kinds of factors on the income inequality.The main innovation and contribution of the thesis contain:this is the first study of SWB from the income distributive inequality perspective; and we theoretically investigate the internal mechanisms that the income inequality influence the SWB; according to existing literatures and combining with policy that "let part of the region and part of the people get rich first, the first rich help others and ultimately realize common prosperity." We proposed an assumption that an "inverted-U" shape relationship between income inequality and SWB, and we proved this assumption using micro survey data.