Research On China’s Income Distributive Orientation In Factors

China has achieved great success in economic growth in the past thirty years, but structural imbalance has become the central issue in the process of economic growth, especially the imbalance of income distribution structure, no matter the distribution structure in factors, objectives or in market. Since the distribution structure in factors almost determined the final structure, it’s suitable to solve distribution problem in the perspective of factors income structure.The labor’s income share in national income declined in the past ten years, thus it can be illustrated that income distribution system is inclined to encourage material capital to accumulate. Indeed material capital promoted ecnnomic growth in the past years, thus material capital ought to be given more income in order to promote ecnomic growth, yet when income disparity in factors grows wide, and it is becoming hamful to economic growth. So all kinds of advises are proposed to correct the incentive orientation of income distribution.However system is a kind of objective with goals, so is income distribution system. Wether to transform the incentive orientation of income distribution or not, and how to transform should be determined on the basis of the distribution system goal. If the the incentive orientation goes out of the way, then mesures should be taken to correct the orientation.This paper aims to propose the goal of the income distribution system, furthemore to show which factor should be incentive, then to estimate the current incentive orientation on the basis of the goal. Finally if the orientation goes depature, proper mesures should be taken.This paper is constituted of six chapters.The first chapter is instruction, which presented the reasons why to choose this subject.The second and third chapters summarized the income distribution theory and practice in China, which aims to sum up how the incentive orientation goes ahead. The fourth chapter firstly proposed the aim of income distribution, which is drafted to prompte growth as well as even distribution, and then proved that human capital especially idiosyncratic human capital is the key to achive the distribution syetem goal, which illustrated that distribution system should encourage human capital especially idiosyncratic human capital to accumulate.The fifth chapter evaluated the current incentive oritention on the basis of human capital returns. In this chapter, we adopted a new approach to evaluate human capital returns, since the labor share in GDP couldn’t reflect the long-term character of human capital accumulation and returns, which is just reflucted by the method of Internal rate of return (IRR), so we adopted the method and revised it. The empirical estimates revealed that social returns to human capital investment increased by only a small scale, the ratio of social returns to GDP declined sharply in the past15years, the same thing happened in the ratio of returns to human capital and returns to material capital. The overall changing trends of human capital returns show the same thing as labor share in GDP. At the end of this chapter, we proposed some advises to correct the incentive orientation of income distribution system. The last chapter concluded the paper, and brings the shortcomings forward, which can be researched further.The following conclusions are drawn from this paper.First, the goal of income distribution system is to promote economic growth on the basis of equal return to factors, and this is possible under the new growing pattern, which take human capital as the growing source.So it’s illustrated that effiency and equality are compatible in income distribution.Second, the goal of income distribution can be achieved in the dynamic matching process of human capital enhancement and industrial structure optimizing.We proved this through a revised endogenous economic growth model.Third, the incentive orientation should be correct to encourage human capital, especially idiosyncratic human capital. As a result, income distribution system should raise the return to human capital.Fourth, the evaluation results no matter from the static state or dynamic state revealed that material capital had achieved more returns than human capital, so government should take mesures to correct the current incentive orientation. Fifth, the current returns to human capital are relatively low, which couldn’t form enough incentives to encourage people to accumulate their human capital. Under this circumstance, government should take corresponding measures to lead labors to accumulate human capital.Three innovations are included in this paper:First, this paper proposed the goal of income distribution system,wehich is to promote economic growth on the basis of an even distribution in factors.furthermoer, we proved this goal can be achieved in the new grow pattern.Second, this paper proved with a revised endogenous economic growth model that human capital effective accumulation is the key to achieve distribution system goal, and human capital effective accumulation is accomplished in the dynamic matching of human capital promotion and industrial structure optimization.Third, this paper calculated the maco-return to huaman capital, which is always a difficult problem for the short of data. In this chapter, we adopt a new approach to evaluate human capital return, since the labor share in GDP couldn’t reflect the long-term character of human capital accumulation and return, which is just reflucted by the method of Internal rate of return (IRR), so we adopt the method and revise it. The overall estimation shows the same thing as labor share in GDP.In the sense of comparability; we calculated the return to amterial capital with the same method, which is also an innovation in capital return calculation.