ABSTRACT
This chapter attempts to study the changes in the income distribution pattern, especially widening of the income gap. It focuses on some important aspects of the income distribution changes. The income gap between urban and rural residents was big in China before the reform. The general reason is that China had the dual economic structure like other developing countries; that is, the modern industry sector coexisted with the traditional agriculture sector. The issue on the inter-regional income gap, including whether the gap has been widened and how to view the widened income gap, has always been controversial in the academic community. As for the flow of rural laborers, it obviously narrows the urban and rural income gap, but its impact on income distribution within rural areas is complicated, because the regions from which rural laborers flow out are distributed in extremely unbalanced manner. There are all kinds of value judgments and social responses concerning the widening of the income gap.
