An Empirical Analysis of Factors Influencing Chinese Residents' Income Gap in the Post-Financial Crisis Era

Abstract

It is the key to a country's social stability and economic prosperity to narrow the income distribution gap and establish a scientific, fair and standardized income distribution mechanism. Based on China's income distribution time series data, this paper constructed three sets of multiple linear regression models with Gini index, rural-urban income ratio and Theil index as dependent variables and used stepwise regression method to analyze the status quo and influencing factors of the national income gap, the urban-rural income gap, and the eastern, central and western regional income gap. The research shows that unemployment rate and employment rate in primary and secondary industries are significant factors leading to residents' income gap. Therefore, providing more jobs and chances to increase income for residents serves as an important means to effectively reduce income gap.