Chinese Residents' Income Gap Between The Theoretical And Empirical Research

The personal income distribution is always an outstanding topicduring economic development in today's China, which could deeplyaffect the establishment of the market economic system, the continuanceand the growth of national economy, and social stabilization Using themethods of Economic Growth and Social Science ,a positive analysis isdone about the personal income difference and patterns of incomedistribution in today's China in this essay. Then, the relationship of thepersonal income distribution and the economic development is studied.Some suggestions of policy are given. The essay divides into four chapters. In the first chapter, a review of the fundamental theories of theincome distribution is given. There are two kinds of concepts of incomedistribution: Functional Distribution of Income and Size Distribution ofIncome. As a point at issue in the history of economics, the topics ofincome distribution have been argued greatly. In this essay the authoronly studies Size Distribution of Income. In term of theories, the authorintroduces six schools, such as the theory in classical economics, thetheory in new classical economics, the theory in Keynes economics, thetheory in new Keynes economics, the theory in Marx economics and thetheory in Welfare economics. When we examine these theories, we canfind the income distribution theory in classical economics laid thefoundation for other theories of income distribution. In some sense, othertheories of income distribution are the development of the incomedistribution theory in classical economics. We can find the income gapbetween the residents in urban areas and the residents in the countriesplay an important role in enlarging the income gap in the country wholly. In the second chapter, with the history of income distributionsystems changing, a series of positive analysis are done about the state ofthe personal income distribution, the personal income difference betweenand inside the urban and rural China. In China, the history of incomedistribution systems can be divided into two stages, the two stages aredistinguished according to the reforms. In the essay ,the reforms aremeant to begin in 1978 and we studies the history of income distributionfrom the centrally-planed economic system was established. Then, theauthor studies the current situations of income distribution in China. Theincome gap has being enlarged since the reforms and the opening to theoutsides. The author elaborately analyses the reality that incomedistribution between and inside the urban and rural China are of great tdifference and the author points out the trend that income gap is enlargednowadays. In the third chapter, the author compares Chinese situations withother countries'. We can find the causes of income difference in China bycomparison. The author choose two kinds of countries. One is economictransition countries and the other is developed countries. In economictransition countries, the facts that the stability of income difference intransition countries before the reforms was the results of thegovernment's regulations. After the reforms, the allocation of labor andcapital with the principal of market economy made the economicactivities efficient. In the society, income distribution was based theprincipal of the contributions. As the result, the difference of distributionbecame obvious. By studying the fact of income distribution in American,we can find that it was the government's policies that promote theexistence of the middle class. It is the middle class that have relaxed theincome distribution difference in American. The fact of incomedistribution indicates that the government should play an important rolein income distribution. 2 In the last chapter, Some suggestions of policy were given based onthe Preceding argumentation. To obtain unified conclusion, the authorconsiders it important to examine the theory in reality.