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Urbanization and Earning Inequality: An Analysis Based on Indexes Dynamic Decomposability
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TitleUrbanization and Earning Inequality: An Analysis Based on Indexes Dynamic Decomposability  
AuthorGao Hongying, Wu Kangping and Che Huichun  
OrganizationSchool of Economics, Beijing Wuzi University;School of Economics and Management, Tsinghua University;; 
Key WordsUrbanization; Earning Inequality; Dynamic Decomposability; Multiple Equilibria 
AbstractUrbanization is affected by many factors. These factors not only determine the path of urbanization, but also make an influence on the evolution of earning inequality. As a result, these factors codetermine the regularity and diversity of the relationship between urbanization and earning inequality. This paper decomposes the change rate of urbanization under labor market equilibrium condition. At the same time, this paper applies the indexes of logarithm variance and logarithm absolute deviation to decompose the inequality formula of the net income and gross income from the dynamic perspective of urbanization .Theoretical analyses show that: on the one hand, the increasing rate of urbanization is lower than the expanding rate of employment scale from urban normal factors, and the expanding rate of urban normal factors is higher than the increasing rate of earning inequality which has a positive influence first and then negative influence on the change rate of earning inequality. On the other hand, the different factors related to urbanization have a different impact on these numerical relationships. The empirical analyses of China between 1983 and 2015 basically verify the conclusions. Finally, this paper discusses the policy choices for urbanization combined with the optimum structure of urbanization and the constraints of earning equality in China.  
Serial NumberWP1387 
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