Can Market Competition Decrease Intro-Industry Income Gap: From the Perspective of Heterogeneous Labors

Abstract

Abstract: The changes in market competition can have a significant impact on the income gap. Strengthening market competition is beneficial to decreasing intro-industrial income gap. The results of a theoretical analysis reveal that market competition can on one hand improve industrial demands and prices on low skills and increase the income of low-income labors, on other hand, it can also squeeze the monopoly profit rent shared by the high-income labors and decrease their skill prices and income, and finally, the intro-industrial income gap will be narrowed. The empirical analysis based on the data of listed companies and Chinese General Social Survey (CGSS) further verifies the above-mentioned mechanism. This finding shows that the building of the competitive market system and the fair income distribution system has solid theoretical foundation and that to keep strengthening market competition can further help to narrow the income gap and achieve common prosperity.

Key words: market competition, income gap, labor heterogeneity

CLC Number:

F404.2

TAN Shi-yu, WANG Zi-li, WU Wan-zong. Can Market Competition Decrease Intro-Industry Income Gap: From the Perspective of Heterogeneous Labors[J]. Contemporary Finance & Economics, 2021, 0(10): 16-29.

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