Analysis On The Component Factors Of Income Gap Of China--1987-2007

In the recent years, great achievements has been acquired in economic growth, simultaneously, imbalance between different areas of China has enlarged as well as the income gap between urban and rural residents. This issue has caused wide public concern. The dissertation focuses on components of income gap among urban and rural residents and people from different areas, as well as components of the changes in income gap among urban and rural residents of China from the year 1987 - 2007, which were measured with Theil index.This dissertation contains three sections. The first section decomposes domestic income gap which is measured by Theil index into three parts, contribution within urban residents, contribution within rural residents and contribution between urban and rural residents. According to the calculation, this dissertation gives some analysis on the value, changes and components of Theil index annually.The second section divides the whole country into four parts: east, middle, west and northeast, then the urban (rural) Theil index can be decomposed into five parts: east income gap, middle income gap, west income gap, northeast income gap and income gap among people from different areas. According to the calculation, this dissertation analyzes changes and components of urban Theil index as well as rural Theil index. When it comes to the third section, this dissertation calculates the changes of Theil index annually and decomposes it into three parts: alteration of income gap within group, alteration of components of samples, alteration of mean value of income within group. According to the calculation, this dissertation also gives some analysis on the changes of Theil index annually and its components.The last part echoes main conclusions: the income gap among domestic residents has been enlarged while the increasing speed slowed down, income gap within each area is the dominant issue but income gap between different areas should also be concerned, income gap within group and average income gap between different groups should be put more emphasis. Ultimately, this dissertation also gives some advice on how to narrow the income gap among urban and rural residents and people from different areas of China .