Industry Monopoly And Empirical Analysis Of Its Impact On The Income Distribution Gap

Along with the sustained, rapid and healthy development of China’s economy, people’s absolute income has increased rapidly. However, the gap between the residents’ income has broadened all the time and our feelings of injustice has become more and more strongly. This phenomenon is particularly prominent in terms of industry income gap and the public pay higher and higher attention to it. This paper will successively study the income gap between competitive industries and monopoly industries, the respective internal income gap of competitive industries and monopoly industries. In addition, it will find out the main reason for the industry income gap and preliminarily explore the rationality of the monopoly industries high income.Firstly, this paper introduces several classic theories about industry income gap. Then it carries a descriptive statistical analysis on the income gap between and within industries and introduces the extra-wage income and the hidden income at the same time. Secondly, In the following empirical research,the paper estimates the industry Mincer wage equation taking advantage of data in sample industries from 2010-2011; and it measures the contribution of selected industry characteristics to industry income gap employing the Ranis-Fei decomposition method. After that, it uses the Oaxaca-Blinder decomposition method to analyze the income gap between competitive industries and monopoly industries. Finally, it uses the Fields decomposition method to analyze the respective internal income gap of competitive industries and monopoly industries.The empirical analysis shows that:the industry income gap has tended to narrow since 2008, but the present situation of the industry income inequality is still very grim. The internal income gap is the main contributors to the respective income gap of competitive industries and monopoly industries. So we should pay enough attention to the internal income gap of various industries. The relatively large contributors to the industry income gap are Monopoly、per capita profit and overall labor productivity in turn. Moreover, Monopoly is the main reason for the industry income gap, and its contribution is as high as 60%. Besides industry employment size had no significant influence on industry income gap and increase in foreign direct investment proportion is helpful to narrow the income gap between industries. In other words, Monopoly is still the biggest contributor to the income gap between competitive industries and monopoly industries. Nevertheless, the contribution of workers’ education degree to the income gap between competitive industries and monopoly industries is very small. As a consequence, high income of monopoly industries is not reasonable to a great extent. Workers’ education degree has little impact on the internal income gap of monopoly industries, but it has a certain influence on the internal income gap of competitive industries. Therefore, this also suggests that monopoly industries income formation mechanism is not reasonable to some extent.This paper puts forward the corresponding policy recommendations on the basis of theoretical and empirical research. For example, transform the function of the government, promote the economic system reform, speed up the separation of governmental and enterprise function. Introduce market competition mechanism, get rid of trade monopolies. Reform of monopoly industries income mechanism, reduce the degree of its premium. Deepen reform of the tax system, strengthen tax regulation. Increase human capital investment, raise the workers’education degree. Cultivate and improve the labor market, strengthen the reform of the labor market. Formulate and perfect the law, ensure the effective implementation of the relevant laws and regulations.