Research On The Effect Of Income Distribution In The Upgrading Of Industrial Structure

It has been a history of thirty-six years for Reform and Opening-up. China’s economic and social outlook have undergone changes in turn the world upside down:the economic developed rapidly and sustainable, foreign trade volume had been increased, the economic structure had been improved and optimized, the results of Reform and Opening-up are significant. Through these years, the development of economy caused the change of demand structure, the optimization of industrial structure, and the expansion of employment scale. What’s more, the level of urban and rural residents’income was improved. But the income distribution pattern changes, the gap between high and low income groups is more and more big. The widening income gap which is between urban and rural, between regions, between industries has seriously affected the overall development of China’s economy. The realization of a well-off society is blocked. Therefore, it is very important to deeply analyze the problems of China’s income distribution and have a research on how to solve the problem of income distribution in the rapid economic development. Economic development depends on the adjustment of industrial structure, it is also a core problem in the operation of our economy. What is more serious is that the adjustment of industrial structure must be carried out. What kind of impact on the income distribution can it be from the upgrading of the industrial structure? How deeply will the impact be? How can we narrow the income gap between urban and rural residents by adjusting the industrial structure? How can we change the income distribution through the upgrading of industrial structure? This will be the starting point c and the foothold of this thesis.In the first place, this thesis reviewed the research on international references, summarized theories which correlated with the problem of income distribution, and then explained theoretically the relationship between income distribution and upgrading of industrial structure. Thereby, this thesis summarized the status of China’s industrial structure and analyzed income distribution between towns, between regions and between industries. After the following chapters, applying the data from 1978 to 2012, this thesis made a research on the relationship between industrial structures and income distribution though the income gap between urban and rural residents. After the test between the two variables, the thesis analyzed the influence on the income gap from primary industry、secondary industry、and tertiary industry specifically.After testing and analyzing by constructing VAR model, the results show: Co-integration relationship which is between the industrial structure and the income gap is long-standing and stable. Industrial structure is the Granger reason of urban-rural income gap. The second and tertiary industries positively correlated with income gap, but primary industry negatively correlated with income gap. Three industrial output has a long-standing and stable co-integration relationship with the income of urban residents and with rural residents’ income. The second and tertiary industries are the Granger reason of urban residents’income and rural residents’ income. Increase the value of the secondary industry will increase the income of urban residents and the income of rural residents. Tertiary industry output increases will reduce the income of urban residents and the income of rural residents. The problem should to be solved that irrational industrial structure caused a greater income gap. The problem can be solved by eliminating dual economic structure, by optimizing the primary industry, by stabilizing secondary industry, or by promoting tertiary industry. Though these initiatives adverse effects can be reduced which causes from the income gap to the economy and society.