Research On The Income Gap Between The Industry In China And Its Influence On Economy

With the development of economy, our country’s industry income gap isgradually expanding. In recent years, the income gap between the industries of ourcountry has gradually aroused attention from all sectors of society. Industry incomeinequality has an important impact on our country’s economy and society.China’s industry classification standard has been revised several times since itenacted in1984. This paper first made a general introduction on the divisionstandard and measurement method of the income gap between the industry in Chinaand the definition of industry revenue. By utilizing the Longitudinal comparison,extreme ratio, percentile, Gini coefficient, Theil index, Theil index by industrydecomposition method detailed combing the income gap between the industries ofour country in1994-2002years. On this basis，this paper focuses on the analysis ofthe two main factors of the influence of income gap between the industry of ourcountry: The industry monopoly and Differences in the level of industry humancapital. The last, theoretically discuss the effect of industry income gap on theeconomic growth, industrial structure, employment structure and then use therelationship of co-integration test, impulse response function method to analyze theincome gap between the industry and economic growth in china.Through the above comprehensive analysis, this paper found that since1994theaverage wage of every industry are obviously increase, but have very differentincreases. High-income industry wage income growth significantly faster thanlow-income industry, income of two stage differtention is more serious. Overall, theincome gap between industries in China showed a tendency to expand, although inrecent years the income gap between the industry has decreased, but the rate ofdecline is very limited. China’s high-income industry is more of a monopoly natureof the industry and also have a higher level of human capital. According to theeconometric models show results, In the short-term, the income gap between the industries’ influence on economic growth is not obvious, but in the long-term, theincome gap between the industry has a negative effect on the economic growth.Finally, based on the above analysis results, this paper proposed to increase thedegree of competition, reduce the level of monopoly industry, raise the level ofindustry human capital, perfecting our country’s tax policy and make reasonable taxto adjust income distribution inequality and other countermeasures.