The Income Distribution Effects Of Industrial Monopoly In China

The economy of China has increased with high speed since the reformation and opening. At the same time, many social problems are appearing. Among them, the problem of income distribution is urgent to solve which will influence the economic growth and social stability to a great extent.The income gap among industries is a key of understanding the income gap in China. All of the factors which bring about income gap are almost related to the industry. The broad meaning of Urban-rural gap and dual economy is the difference of agriculture, industry and service. It is generally admitted that income gap among various industries is not only related to human capital content, production capacity, labor productivity and technical level, but also related to the industrial monopoly. All of the factors, industrial monopoly is the most important one. The industrial monopoly influences the income distribution which is mainly presented as the income gap between monopoly industry and competitive industry.This thesis gives the specific definition of industrial monopoly, monopoly industries and various incomes firstly. Then I analyze about the income distribution effects of industrial monopoly including salary distribution effects and the distribution effects of income beyond salary. In the study on salary distribution effects, we describe the current situation of industrial salary and make use of correlation coefficient and factor analysis. And when we study the distribution effects of income beyond salary, we mainly talks about two aspects, that is, the case analysis of apparent income that beyond salary and the income that beyond salary including unapparent income. We analyze the income of different industrial sectors which is calculated by date fitting. The data is the estimation results by Engel coefficient method. In addition, we analyze the reasonability and formation mechanism of current income gap between monopoly industry and competitive industry. On the one hand, we study the reasonability from two aspects, that is, Output of per income unit and the employees’ educational level. What’s more, we comprehensive use of the Oaxaca-Blinder decomposition and related data analysis. On the other hand, we make theoretical analysis of formation mechanism from three aspects, that is, the high profit obtained by monopoly industries, owner absence and insider control and defects of the labor market.In this paper, we show that all of the factors which affect the average salary, the degree of administrative monopoly is the most important one which causes the income difference between monopoly industry and competitive industry to a great extent. Moreover, monopoly industries can get income beyond salary more easily so that the income beyond salary between monopoly industry and competitive industry has an obvious gap which is even more severe than the salary gap. The income gap among industries mainly results from the extra income that beyond salary rather than the salary. In addition, by analyzing the reasonability of the high income in monopoly industries, we find that the high income does not match with the output in monopoly industries and the high educational background has almost no effect on the inter-industry income gap. About all, it implies that the high income in monopoly industries is unreasonable to some extent. the formation and maintenance of income gap between monopoly industry and competitive industry are resulted from the high profit obtained by monopoly industries, owner absence, insider control and defects of the labor market.