The Impact Of Income Distribution On Economic Growth

Any country or region has experienced rapid economic growth, which has toface some growth pains or worries at the same time. One of the problems whicheconomic growth brought about is that the income distribution gap is graduallywidening. The GDP of the whole region is increasing year by year, as well as theliving standards is constantly improving. However, the gap between different incomegroups is also increasing. Now the income distribution problem is not the points howto cut the cake of national wealth more fairly, but how to make the outcome of thereform and development to the benefit of all resident. Income distribution is not onlyone of the aspects of the social and economic activities, but also related to the socialrelations of production ability to adapt to the development of the productive forces.In recent years, China economic growth continued rise, which sometimes makespeople blinded and then overlook the economic, social and livelihood issues.Through decades of development, our country is getting closer to the goal of awell-off society. But the people still feels that the social gap between the rich and thepoor is very large, especially the income gap between urban and rural areas. It isnecessary to explore the relationship between the gap in income distribution andeconomic growth and then find a high-quality development way.As one of the big provinces in the northeastern China, Jilin Province has uniquenatural resources. The total economy maintains a relatively strongly growth speed inthe nearly twenty years. The GDP steps towards a new one-hundred-billion yuanyear by year. By the way, Jilin is also facing with a widening income gap. There isstill a lot of space for people’s livelihood to improve. As the economic theory generally considered, the larger income gap is not conducive to economic growth. Sothis theory can be set up for a certain area or not needs to make the analysis anddiscussion. In this case, this paper attempts to explore the deeper mechanism ofincome distribution impacts on economic growth, and with Jilin existing data toverify the extent that the income distribution impact on economic growth. Humancapital is selected as an intermediate variable in this paper. Through the impact ofincome distribution on human capital, explore the impact on economic growth. Inthe analysis of the transmission mechanism, I find that income distribution wouldhinder investment in human capital, and then get preliminary conclusion that incomedistribution is not conducive to economic growth in Jilin. In the subsequent section,with the help of econometric analysis tool, I make the regression analysis of the datain the20years between1992-2011, improve growth model based on theCobb-Douglas production function and confirmed the correctness and validity of thepreliminary conclusions. On this basis, the paper gives some commendations on thefuture economic development of Jilin. With limited statistics, some variable valuescan’t be achieved. Most of the data are obtained from the Jilin Statistical Yearbookcalendar. The replacement of the variable may affect the results in the actual value insome extent. Therefore, the conclusion of this paper is still inadequacies. I hope thatit can be constantly improved in future research.