The Influencing Factors of Income Distribution and Growth in Taiwan
Date Issued
2011
Date
2011
Author(s)
Chen, Ting-Yu
Abstract
This study investigates the influencing factors of the income inequality and economic growth in Taiwan cities and counties with the sample period from 1998 to 2008. The sample data are taken from the Finance Data Center in the Ministry of Finance, and five quintiles of household income are selected in the study.
Our major findings are as follows. It shows that the relationship between each education level of employees and the income inequality is negative. The increase in the education level of employees is also contributive to increase the total income of the cities and counties and the average real household income of all quintiles. Increasing population promotes the local total income and enlarges the inequality of income distribution. Aging population brings a positive impact on local total income and the household income of all quintiles, it enlarges the income inequality but statistically insignificant. Increasing real capital and the financial deepening are positively related to the growth of local total income and the household income of all income quintiles that contributes to reduce the income inequality.
Furthermore, international trade is positively related to the total income of cities and counties although it is not significant, and it has positive impact on the increase of low income quintiles, but has a significantly negative impact on the highest income quintile, that helps shorten the inequality gap. The increase of FDI inward helps increase the local total income, it also results in a positive impact on all income quintiles, that helps to reduce the inequality gap but insignificant. The increase of FDI outward is insignificant to the income inequality and total income of cities and counties. And it also has no impact on the middle income group, but has a negative impact on the lowest and the highest income quintiles. In addition, the population ratio of each occupation does not have a significant impact on the income distribution – raising in the industry employees ratio is in favor of increasing the local total income and the household income of all income quintiles, but raising in the agriculture and service employees ratio has negative impacts on the local total income and the household income of al income quintiles.
Subjects
income inequality
economic growth
household income quintiles
Type
thesis
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