Trade And Income Growth, Income Inequality

With the rapid development of globalization from 1990s, the enlargement of income distribution has become an difficulty that all countries especially the developing countries are now facing. So the impact of trade on income distribution has also become a hot topic all over the world.Based on the related theory of international trade, international economics, statistics, econometrics and income distribution, learning from the latest research achievements both at home and abroad, using the latest data in recent 10 years, from the angle of foreign trade, the paper studies income growth and income inequality by the method of quantitative analysis and qualitative analysis.The article systematically expounds the latest domestic and foreign theories and empirical research results about the effect of foreign trade on the growth of residents' income and income inequality. Then, from several angles of whole Jiangsu province, urban and rural areas, regions and industries etc, the paper analyzes the change of foreign trade of Jiangsu province, income growth of residents and income inequality from 1992 to now, summarizes the characteristics of foreign trade of Jiangsu Province and the growth of residents income in the past over 10 years, and calculates Gini coefficient to reflect the level of income inequality, discusses the relationship between income growth of residents and income inequality trough correlation analysis. Afterwards, using econometric methods, the article carries out an empirical study towards the effect of Jiangsu province's foreign trade on the growth of residents' income, configures three regression models from the perspective of whole Jiangsu province, urban and rural area, south area, central area and north area of Jiangsu province, analyzes the impact of trade on income growth. Finally, based on the specific conditions of Jiangsu Province, the paper explores and analyzes the mechanisms and ways of trade's affecting income inequality, constructs two models from overall perspective and urban and rural perspective to carry out an empirical test towards the relationship between trade and income inequality. Through the above analysis, the paper draws two conclusions: firstly, foreign trade has a positive effect on income growth of whole residents of Jiangsu province, urban area, south area, central area and north area. Moreover, the area where trade grows faster, the income of residents grows faster too. Secondly, foreign trade causes the enlargement of residents' income and the incensement of income inequality of Jiangsu province through the way of trade terms' changing, influencing supply and demand equilibrium of labor market, changing employment structure and the unbalanced development between town and countryside.Based on the research results, from the aspects of improving trade level, supporting the trade and related industries of rural area and emphasizing the balance of regional trade, the paper puts forwards suggestions of developing foreign trade rationally, keeping balanced regional development at the same time of promoting income growth of residents, and give an outlook of future direction of this topic.