The Impact Of Income Gap In China On Economic Growth

In recent years, income inequality has been growing with rapid economic growth of China. And this economic problem absorbs public's attention in resent years. On one hand, the growing income gap means that the survival and development of low-income groups can not be guaranteed, on the other hand, income gap also has a bad effect on the long-term economic growth of China. Therefore, it has practical significance to study the impact of Chinese income gap on the long-term economic growth. This paper analyzes the impact of Chinese income gap on human capital accumulation and physical capital accumulation. To explore relationship between the Chinese income gap and human capital accumulation, this paper presented the idea that income gap promoted human capital showed in scatter plot was because of other four impacts. Excluding these impacts Chinese income gap surely had a negative impact on human capital accumulation in the long term. This paper analyzes the mechanisms of the income gap on physical capital accumulation, and the empirical results show that the income gap is conductive to physical capital accumulation. But with the continuous development of China's economy, human capital accumulation will play a more and more significant role of China's economic growth in the future. In this sense, narrowing the income gap has an important significance for the promotion of human capital accumulation and long-term economic growth in China. Finally this paper raised some policy recommendations to narrow China's income gap.