Income Inequality And Subjective Well-being Of Chinese Urban Residents

As the most important index to measure the economic power of a country,the growth of GDP had been the first priority for Chinese government in the past many years.However,the growth of income doesn't always enhance the living quality for everyone.Although China's GDP have tremendously increased,even became second largest in the world,the happiness of Chinese citizen faced sharp decline in recent years.With that being said,the GDP oriented economic development plan is no longer suitable.The enhancement for happiness of Chinese residents is becoming a prominent issue for Chinese government.Many researchers are trying to break down this issue and figure out why does this so called Easterlin Paradox occured.In recently years,more and more researchers found out that income inequality play an important role in it.Because China's economic development is unbalanced,there're huge income gap among different provinces,and between urban and rural areas,income inequality become even larger.Considering the close relation among income inequality and subjective well-being,and social insurance expenditure being one of the important measurements for governments' effort to influence income inequality,using empirical tools to analysis the relation among income inequality,social insurance expenditure and subjective well-being is very necessary.This research first focus on theoretical analyze on the influence that income inequality have on the subjective well-being of Chinese urban residents.Then using the pooled cross section data to conduct empirical analysis on the ‘upside down U curve' relationship between income inequality and subjective well-being,which means when income inequality level increase from low level to the turning point,subjective well-being of residents increases as well,but as long as income inequality level pass the turning point level,the SWB will declined sharply.After that,we combine CGSS data with macro-economic data published by Chinese National Bureau of Statistics to test whether there's a moderation effect that social insurance expenditure played between the relation of income inequality and the subjective well-being of Chinese urban residents.