Research On The Income Mobility Of Chinese Households

As the old saying goes:"Inequality rather than want is the cause of trouble".More than30years of reform and opening-up, Income of Chinese residents increase sharply, but the problem of income distribution has become increasingly prominent. Growing income gap is an indisputable fact. According to the Survey of the Ministry of Finance in2010, the income gap in China has reached the status of "a high degree of inequality",10%wealthy households accounted for45%of all the property of the city residents,10%households in the lowest income property accounted for1.4%of total residents property. The18th National People’s Congress report:"Making Great Efforts to solve the income gap so that the fruits of development are more fairer to benefit all people". Both National Peoples Congress and Chinese Peoples Political Consultative Conference in2013point out:"Trying our best to formulate the total income distribution reform program to realize the value of labor income", As a result, China’s income gap has become a social problem which needs to solve urgently. How to measure the true income gap and on revealing the real reason why income inequality is gradually expanding are the keys to solve the issue of income distribution.The existing reaseaches use the static index such as the Gini Coefficient and Theil Index to analyze the inequality of income distribution results, It has been mostly not too much to consider opportunities ranging from the impact of the income gap. In fact, the income gap is often associated with psychological perception of social fairness and justice. The income gap formed under conditions of equality of opportunity due to the personal efforts preferences is a socially acceptable and tolerated.In order to accurately analyze the income gap from the ranging opportunities, a large number of scholars began to study on Income Mobility.In1962,Friedman firstly proposed the idea of Income Mobility, he believes that:"There are two societies with the same income distribution,one society has a greater Income Mobility, so that the specific family income level have changed a lot from year to year, but the Income Mobility has great rigidity in another society, each family stay son the same family income level every year. Obviously, the second society is more unfair". Subsequently, the Income Mobility quickly become the focus of the income distribution, many scholars analyzed Income Mobility in the framework of the income gap measure, and had made considerable researches. Relative to developed countries, China’s research on Income Mobility is weak. Therefore, learn from the foreign experiences, It has important theoretical and practical significance that we build Income Mobility research framework for China’s national conditions, and accurate analysis of the impact of inequality in the distribution of income, provide the references for really reversing the widening income gap-In this paper, the basic research element is a household, the thesis is the measurement, determinants of Income Mobility, the research methods includes literature research, descriptive statistics (including statistical charts, statistical figures, mean, standard deviation), Logistical regression analysis, econometric models, income transformation matrix as well as its index. The empirical study is conducted with Stata, Excel, Eviews, SAS, using CHNS as data resource.The whole paper is arranged in the status of Income Mobility, influence influence factors, the role of the Income Mobility in income gap and is divided into nine sections.The first four secions of the paper are the theoretical basis and data preparation stage. The main task is to build the research base from the theory and data aspects. Secion1,Secion2and Secion3base on relevant literature at home and abroad, analysis both from the perspective of Income Mobility and measure system on this basis and define the meaning and measure of Income Mobility guidelines to construct this article research framework. According to the basic theory of labor economics, welfare economics and sociology, Secion4processes CHNS data and draws on existing research results, as much as possible screening variables in the Institute.Secion5measures the level of Income Mobility. We use the income transformation matrix and measure indicators to research Income Mobility of the country, urban, rural and regional characteristics, to focus on the level of Income Mobility differences between the different periods and different walks of life in the country, urban, rural areas and the region area. This results show that, First of all, the lowest-income and the highest-income sectors of the economy are short of mobility, especially in the Northeast, the growing gap between the rich and the poor in China is increase, Matthew Effect of "the poor are more poor, the rich get richer "is even more obvious. Secondly, The middle-income sector of the economy is satisfied,especially in the western region.Again,The Income Mobility in Western region is best, in Eastern region is worst.Finally,the income mobility in period2000～2004year is the highest in our study of all years.Secion6measures the structure of Income Mobility.on the basis of the level of Income Mobility,we use the proportion of upward mobility, downward mobility and the ratio of up and down to research the Income Mobility structure of the country, urban, rural and regional characteristics.This results show that, First of all the structure of Income Mobility is not satisfied.Down-Mobility is more than Up-Mobility, Second, the upward mobility of the lowest-income sector of the economy and the downward mobility of the highest-income sectors of the economy are short of mobility, and the middle-income sectors of the economy is tend to Down-Mobility as well as instable. Again, the mobility structure of rural income groups are better than the city, but more fluctuate than the city. Finally, the overall structure of Income Mobility in Eastern region is superior than in other regions.Secion7analyzes the influence factors of Income Mobility. We screen the influence factors of mobility, compare the relative importance of these influence factors,and provide the basis to promote the sound development of Income Mobility. First of all, the influence factors of the urban and the rural households have differences and similarities. The same negative influence factors are:household size and its changes, the dependency ratio, age-squared and of income status, The same positive influence factors are:the changes of dependency ratio, age, gender, education level and its changes, whether have medical insurance and initial income status. Whether Own property, wage income and its changes have the significant positive impacts on urban households. Whether own farm equipment, nonfarm income and its changes have the significant negative impacts on rural households.Second, the importance of the influence factors is different.Income structure and the level of education are more important than other influence factors for both urban and rural households. It implies that increasing the wage income of urban households and non-farm income of rural households and improving the level of education of the urban and rural residents rae the basic way to increase upward mobility.For urban households, owning property rights is also classified as the most important factor. Whether have health insurance and income status are the second important influence factors for the urban and rural households, confirming the rationality of urban-rural medical insurance system reform. It’s worth noticing that demographic influence factors (household size,dependency ratio, household head age, household head gender) and farm equipment which is on behalf of the rural households material assets are on the third or fourth level of importance.Secion8analyzes the role of the Income Mobility in income gap.income gap changes are due to two influence factors:Income Mobility and Income Growth Progressivity in the country, urban and rural areas. The results show that the reason why the long-term income gap tends to alleviate and the short-term income gap is increasing is Income Mobility. And the diffusion effect of Income Mobility to the income gap is greater than the revenue effect of Income Growth Progressivity to the income gap.Secion9summarizes the conclusions and puts forward the suggestions. We summarize the Income Mobility situation, the Income Mobility influence factors and the role of the Income Mobility in income gap, and put forward corresponding countermeasures and suggestions to indicate further research directions.The innovations of this paper include the three aspects:First, this paper studies Chinese regional residents’ Income Mobility. The existing research seldom compare and analyze the Income Mobility from a regional perspective.owing to China’s vast territory and different environmental conditions, this paper studies Income Mobility from the three aspects:the country, urban and rural, and regional areas, suming up the different characteristics of Income Mobility not only riches and developments the Income Mobility research direction, but also provides a meaningful reference for the income distribution policy.Second, this paper analyzes the contribution rate of upward mobility and downward mobility between various income groups. The Income Mobility between the various income groups is seldom happened in the existing research, Few literatures study.mainly bases on the mobility ratio. In this paper, on the basis of the mobility ratio, analyze the contribution rate of the mobility ratio of all income groups, and compare the characteristics and trends, to provide a reference for building the Chinese olive-shaped society.Third, this paper decomposes the Gini coefficient changes of the country, urban and rural to examine the impact of Income Mobility on the income gap. Existing Literature is not decompose income gap from the three aspects of the country, urban and rural。this paper systematic analysis of the relationship of income gap and Income Mobility in the country, urban and rural income, mobility and income distribution has been more, which gets more distinctive understanding of both Income Mobility and income distribution,.There are some deficiencies in this paper. Firstly, the available data limits the the accuracy and reliability of research. The Income Mobility requirements enough panel data, However, CHNS have the eight surveys, but the households involved in the eight surveys are so few and unable to meet its continuity and comprehensiveness, this is no doubt that the results affect the accuracy and reliability.of the conclusions of the study.Second, the available data has severely limited Income Mobility influence factors in the regional areas. In each area, although there are a certain number of households involved in the CHNS data, the contents of Income Mobility influence factors are extremely lack, so that can not meet the requirements of large sample data, therefore, we cannot empirically analyze the influencing influence factors of regional household Income Mobility.