China's Income Distribution Trends And Influencing Factors Analysis

After reform and opening, our country's economy develops fast. People's living standard has improved a lot. At the same time the income inequity among persons also becomes very serious. This problem not only affects the living standard of people but also affects the continuity of our country's economic development. So this paper analyzes the changing of our country's income and distribution since 1978 and finds some reasons of this change.There are many indexes in measuring income distribution ,for example: the Income Share of Certain Number Population, Theil index, Atkinson Index, the coefficient of Gini and so on. We chose the coefficient of Gini as the best index. After analyzing the stages of income and distribution from the reform and opening , I divide the time into six stages. They are: 1978-1984, 1985-1989, 1990-1994, 1995-1997, 1998-2003, 2004-2005. In each stage our govement's economic policy and economic development play the most important parts.The famous 'Kuznets curve' hypothesis says that in the process of developing country to developed country this hypothesis is always correct. I tests the hypothesis of 'Kuznets curve' using two kinds data, finding that this hypothesis is mostly not true in our country. We should deal with income inequality by the help of govement's policy not only by economic growth.After all of the above, I think the reasons of our country's income inequality are: dual construction, economic increase and system changes. After analysis from theory and data, I finds that the dual construction makes the income distribution between village and city high , the economic increase has a positive relationship with Gini and the irregular part of system changes make the income inequality deeper. At last I make some suggestions to solve this problem: the liquidity of village labors, the perfection of our distribution system and the redistribution.