The Impact Of Public Transfer On The Family Income Inequality

The public transfers as a means of adjusting income redistribution, may direct and indirect impact on household income. So, the public transfers as a means of adjusting income redistribution in our country, whether it widening or narrowing the gap between the rich and poor? Whether it improving the income of low-income people? Whether we should to adjust the current social welfare system to reduce the income inequality? To study the effects of public transfer to the family income inequality not only could provide the new empirical evidence for the effects of the public transfers to inequality, but also could provide certain theoretical basis when the government formulates the anti-poverty policy and regulates the income inequality, and also could provide micro circumstantial evidence on a macro level when we study the relationship between the public transfers and income inequality.This thesis is mainly divided into five parts:Chaperl. Introduction. This part mainly introduces the problem of what will to study, the related concepts, the innovation and deficiency in this paper. Chaper2. Literature reviews. In this part we mainly introduces the income distribution theory, the relevant theories of transfers and the research progress of income inequality in our county.Chaper3. Model selection. In this part we mainly introduces the income decision equation and the shapley decomposition.Chaper4. Empirical analysis. First of all, we organize the questionnaires of the China Health and Retirement Longitudinal Study. Then, We conducted a descriptive statistical for the variables in this part. At last, by establishing the regression equation, we analyze the effect of variables to the family income, such as the head of household variables (education, age, health condition),family characteristic variables (labor rate, financial assets, land, electrical appliances) and the family public transfer income. By shapley decomposition, we observe the contribution values of the variables to family income inequality. In addition, according to the east and Midwest, the urban and rural grouping, we also analysis contribution values of each variable to the family income inequality. Chaper5. Conclusions and policy recommendations. From the empirical analysis conclusion, we put forward the corresponding suggestion about the income inequality between families in China.The empirical results show that the public transfers contribute to the family income inequality reached37.99%, In China, the public transfers did not reduce the income inequality among families but exacerbated income inequality among families. This may be due to that the public transfers tend to aim at the population that has formal employment work, and it no real coverage to the poor or the vulnerable groups. In addition, the head of household education becomes the second element that affects the family income inequality and it contribute to the family income inequality reached8.63%. With the expanding of the capital market, the property income such as financial assets becomes the third element that affects the family income inequality after the salary and the public transfers.From the grouping of the east and Midwest, the urban and the rural, we find that the public transfers to the interpretation of the family income inequality is different from area to area, the eastern is greater than the Midwest and in the rural areas greater than in the urban areas. This may be due to that the Midwest and the rural areas are relatively backward in economic development and there are few people have regular work in those areas. While in the eastern and the city areas the economic is relatively developed, the number of state-owned enterprises, formal institutions and enterprises is significantly higher the Midwest and the rural areas. In the eastern and the city areas, there are more people have the regular working and the public transfers involves more people than those people that in the Midwest and the rural areas.