Correlation between Employment and Income Distribution in China

The employment and income distribution problems after reform and opening up havebecome more and more lasting. To get these problems clear is of great practical significancein acquiring a deeper understanding of the nature, characteristics, and root causes of thecurrent income distribution and employment problems; and finding a solution is to contributeto the building of a harmonious society. The co-existence of a half-market and half-traditionalsystem is the basic feature of employment and income distribution in China. This paperanalyzes the general and structural correlations between income distribution and employmentin China. In the analysis of structural correlation, the paper explains the multi-institutionalsegmentation in the transitional period. In the multi-level areas segmented institutionally,the wage income gap or labor income gap has become the main factor contributing to thegeneral income gap. To narrow the income gap, it is therefore necessary to attach muchimportance to the reform of employment-related institutions, the establishment, and theimprovement of the market economic order.