A Study On Income Growth, Income Inequality And Social Welfare Of Urban Residents Of China

Since reform and opening-up, the Chinese economy has scored fast development, the standard of living of urban residents of China has been improving unceasingly. In the new century, Central Committee of CPC put forward the goal of building a harmonious society, income growth isn't only concerned about in harmonious society, but also the improvement of social welfare. Let the low-income class get more benefits from economic development.Under such background, this paper set up the indexes, which have values. The urban residents are divided into three groups by income level, and per capita income growth is used to express the growth of social welfare of each group, then per capita income growth is weighted according to the proportion of income, the proportion of the population and"poverty weighted"index. We can get three weighted sums, we can evaluate the growth of social welfare of urban residents of China by comparing the weighted sums, if the first weighted sum is lower than others, it means that social welfare of urban residents has been improved, the low-income class get more growth of social welfare. We also calculated the Gini coefficient of urban residents of China from 1985 to 2005, evaluated the growth of social welfare of urban residents of twenty-two provinces. We use those indexes and Gini coefficient to evaluate the income growth , income gap and social welfare of urban residents of China .Through empirical analysis, we founded that from 1985 to 2005, the growth of income of each group was notable, but the growth of income in low-income group was slower than that in high-income group; The growth of social welfare calculated by"poverty weighted"index is lower than the growth of income, and social welfare should be improved, the low-income class doesn't get more benefits from economic development; The income gap among urban residents was widening.The main reasons of this growth are slow growth of income of low-income class and widened income gap. The lack of property income, demographic characteristics and family factors make the growth of income of low-income class be slow .the income gap was caused by the reform of income distribution system, reform of state-owned enterprises, monopolized industries existed and imperfect tax system.In order to improve this balanced growth, it is necessary to increase the incomes of low-income class and adjust the income gap. We can increase the incomes of low-income class by adding to their property income, strengthening the training of low-income class, increasing the rate of employment of low-income family. Through sustained economic development, perfecting the tax system, improving internal distribution system, we can minify the income gap among urban residents.