The Influencing Factors Analysis Of Income Distribution Of Rural Residents In Jilin Province

In recent years, with the rapid economic growth of our country and the deepening transformation of our country's economic system, the distribution of income of rural residents in China has become the focus in economic and social sector. Some of the problems of the income distribution in rural areas have affected our country's economic growth. For the analysis of the income distribution and the evaluation of public policies, the general method is using micro-econometric and micro-simulation abroad. Due to the lack of micro data, the existing studies are qualitative and quantitative model is in urgent.First of all our paper study the factors that affect the income inequality in rural areas. Through the analysis of the decomposition of it, we can exactly understand the causes of income inequality. What's more, according to it government departments can regulate policy-related to improve the situation of income inequality. From the early 1970s, economists began to explore ways to the decomposition of income inequality. There are two main methods of traditional decomposition: the elements decomposition,"between-group"effect due to differences in average incomes across subgroups (males and females, say) or the"within-group"effect due to inequality within the population subgroups. Although the traditional methods are very extensive, there are some Shortcomings of these methods. For example, some methods of income inequality can not quantify the role of the underlying determinants, and some methods are only suitable for discrete variables. Thus, economists began to break through the original methods, using the regression analysis. Shorrocks (1999) proposed solution based on the Shapley value. In accordance with the classification rules Shorrocks, Wan (2005) combined it with regression analysis methods to explore the issue of income inequality in rural China.Based on data from a sample survey of farmers in 2005 and 2007 Jilin Province, this paper first estimate the income function through Mincer equation, and referring to the Wan assign contributions to the explanatory factors that contribute to income inequality. While according to Fields and Yoo(2000),this chapter analyze the two-year changes in income inequality decomposition. We draw some empirical conclusions: First of all, the amount of labor, age, region dummy variables, years of education and wage income labor are factors to explain the income inequality in 2005,and of these the interpretation capacity of number of labor account for 33.91 percent of the total income inequality. And in 2007, the factors contain the amount of labor, land, wage income labor, age and region dummy variables. But compared with 2005, the explanation of the amount of labor account for 28.64 percent, decreased by 5.27 percentage points. Secondly, the interpretation of the change between 2005 and 2007 are land, wage income labor and the amount of labor, in which the variable land accounting for 51.60 percent, more than half of the explanatory power. Finally, we study the labor out household and labor non-out household. Of the labor out household, the amount of labor, regional dummy variables, wage income labor, land and age are important. Of the labor non-out household, the only difference is that wage income labor is important factor. Of the labor out household, the important variables explaining the increase of income inequality in Jilin Province from 2005 to 2007 are regional dummy variables, wage income labor and the amount of labor. And of the labor non-out household, the land plays a very important role to increase income inequality level.In addition, in order to analyze the immediate effect of public policies, we simulate some current agricultural policies on rural people's income distribution, and then evaluated the effect of policies. Micro-simulation is first proposed by Professor Guy Orcuut, it provides an effective way to solve this problem. And with the rapid development of computer technology in recent years and the availability of the sources of micro data, this model has been continuous development and improvement. And the application of it becomes more extensive, becoming an effective tool to analyze and evaluate the pubic polices in western. Compared with the western countries, it is relatively late in china. Wan Xiangyu (2008) presented a series of micro-simulation models to analyze and predict the effect of the income distribution in our country. Therefore, this paper draw on a static arithmetic micro- simulation model,using rural households data in 2006 and 2007 in Jilin Province, to analyze the rural polices such as direct subsidies to grain farmers and Minimum subsistence guarantee system for rural areas. Our main conclusions are(:1)the policy—subsidies to grain farmers—plays a important role in improving the income level. The Gini coefficient as the indicator of income inequality is more than 1% reduction. And with further analysis of the data from 2007, it is obvious to see the implementation of the policy increase the average income of household and relieve the degree of income inequality and the extent of poverty, playing a positive role. This is consistent with the reality of the intuitive understanding in macro level. (2)the policy—Minimum subsistence guarantee system for rural areas—has played a certain role to narrow the income gap and alleviate the poverty. The policy impact on low-income groups is more prominent, the income of the lowest income households increased 10.34%. Gini coefficient and FGT index have declined both. We can see clearly it played a positive role.This paper gives a number of empirical conclusions on income distribution in rural. It has a certain reference value to the national policy-making.