Empirical Analysis Of Our Country’s Urban Residents’ Income Inequality And Its Changes

Since1990,China’s economy increases rapidly.At the same time, the issue of income inequality of urban residents increasingly stand out, which has became one of the focus of community concern. Explain the reason that income inequality in urban area and studying the problems of income distribution from different perspectives has became one of the important research issues.In this thesis, we’ll explain the inequality changes of the income of urban residents from two perspectives. Firstly,explain changes in urban residents’income inequality from the point of economic growth in urban areas, the details as follows:measure the income inequality of the provinces of urban residents with the gini index, it needs to estimate the income gini index of provinces’ urban residents from1990to2011,which is a heavy work,so it is an important outcome of this study. Secondly,measure the degree of economic growth in urban areas with the urban residents’ disposable income and select the appropriate panel model to prove the relationship between income inequality and economic growth of China’s provinces’ urban areas conform to Kuznets inverted U hypothesis. the developed provinces such as Beijing and Shanghai, whose economic increase’ impact on income inequality is greater than the underdeveloped provinces. Overall, income inequality in most provinces in the year2010and2011has been reached or exceeded the inflection point.So it can be said that the income gap of urban residents is expected to gradually decrease with the further development of the economy, but few poor areas, such as Gansu,Xinjiang,whose income gap between urban residents is likely to expand, it needs to take some measures to stop it from happen.Secondly, explain inequality changes of urban residents from the perspective of changes of the distribution of income, which also is the main innovation of this thesis. The purpose of decomposition the changes in income inequality is to explore factors which is associated with inequality and to know the degree of resident’ income inequality,so we can take measures to reduce inequality, the most commonly method of income inequality decomposition is:sources of inequality index decomposition method, subgroup decomposition method and dynamic decomposition method. These methods are based on the decomposition of inequality index,but a new decomposition method will be used in this paper,that decompose the probability density function decomposition directly.then illustrate changes in income distribution through a graphical comparison of different periods, and then explain the total change with means of inequality index of income inequality.