Research On The Influence Of The Income Inequality Of Primary Distribution And Financial Development

China’s economy had experienced rapid growth and made remarkable achievements since the reform and opening up.But as a contrast,the problem of income inequality is getting worse and has been a serious challenge in our country.At the same time,the primary distribution which is related to the wage status and welfare level of the majority of laborers plays an dominant role in the overall income inequality and turns into increasingly imbalance between in government,enterprises and residents.Meanwhile,China’s efficiency of capital allocation is improving because China’s financial development is in the stage of structure adjustment and financial deepening.Under this background,this paper studied the relationship between the primary distribution,financial development and the residents income inequality.First of all,based on the review of related literature,the third chapter introduced the direct and indirect influence of financial development on income inequality,then constructed the model of the relationship between Gini coefficient and labor income share.Secondly,the next chapter mainly described the status quo and trend of the income inequality and financial development in our country with large statistical graphes.Then some important indicators were recalculated including the provincial Gini coefficient and the provincial labor income share.On the chapter of empirical analysis,I established a fixed effects model which about the impact of financial development and labor income share on the Gini coefficient using Chinese provincial panel data.In addition,a panel threshold regression model was established to explore the nonlinear relationship bewteen the three variables in the next section.The main conclusions are included that firstly income inequality could be aggravated by the current financial development and be alleviated by the improvement of labor income share.Second,the interaction of financial development and primary distribution is statisticaly significant.Third,the thethreshold effect of financial development is statistically significant and the imbalance of primary distribution is the main cause of income inequality.Finally,the paper put forward several suggestions to narrow the income gap from the perspective of financial development and primary distribution.