Regulation of income as a component of social policy and the distribution system

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The system determines the distribution of opportunities to obtain income from the ownership of certain resources, incentives to work, the division of people into classes and social groups, tackling poverty and others.

The purpose of the course work is defined by the concept of income and distribution system for managing market conditions. Highlight principles of income

The task of a government regulation of income as a component of social policy and the distribution system.

The object of study is the process of formation, distribution and redistribution of income.

The object of study is the mechanism of state regulation of incomes.

In the first chapter consider the essence of income as an economic category, their sources, functions that perform in the economic and legal state and the structure of earnings in terms of consumption.

The second section covers fundamentals like income distribution system in the market mechanism with the principles and use of the Lorentz curve and Gini index action.

Principles of income generation. Lorenz curve. Gini Index

The transition to a market economy is associated with a problem of income distribution in society. The question of how to allocate income, has a long and controversial history. Some economists believe that the basis for sustainable economic development is equality in the distribution of income, others a contrary point of view according to which the desire for equality in the distribution of income can not stimulate the growth of production and leads to economic crisis.

The main argument in favor of equal distribution of income is that it is necessary to maximize the satisfaction of consumers, that marginal utility. The main argument in favor of income inequality is the need to preserve incentives to work, production and income growth. [2, p.. 49]

Formation proceeds in a market economy is based on the following principles:

1. All revenues generated pursuant to the contribution of labor, natural resources, capital and entrepreneurial skills in the production of goods and services. This means that the distribution is factorial in nature, is functional and productive, as the main factor income are the wages, rents, interest and profit.

2. Income from factors of production is proportional to the quantity and quality of resources invested. This established the principle of social justice in the distribution. It means that each participant has the right to increase their wealth, increasing its contribution to improving production efficiency. The principle of social justice does not fix the origin of income, and the degree of equality and inequality in accordance with the distribution. This principle is directly related to functional and productive distribution for equality or inequality depend on due to what and under what circumstances these profits are given.

3. Uneven stories in resources leads to significant inequalities in income. The high degree of uniformity can create a number of socio-economic problems: undermining incentives exacerbate social injustice, degrade opportunities for development.

4. For normal functioning of the economy requires government policies of income redistribution through the budget.

5. In connection with the operation of imperfect competition in modern market economy, the amount of income may not reflect the contribution of production factors in the production of finished products.

This example is associated with monopoly enterprises to obtain an inheritance, win money in lottery racket. [2, p.68]

A characteristic feature of the market income distribution is uneven degree of market income.

Causes of uneven distribution of income:

1. differences in education and special abilities;

2. uneven distribution of economic resources;

3. differences in position;

4. different attitudes to risk;

5. existence of discrimination.

To determine the degree of income inequality in macroeconomic science using Lorenz curve (Figure 2.1). Theoretical possibility of absolute equilibrium in the distribution of income is presented on the graph as the angle bisectors of reference, which shows that in society there is an absolute balance in the distribution of earned income, which is 20% of the population receive 20% revenue and 40% of the population - 40%, etc. . For absolute inequality of income distribution is a direct OE like a sail and shows how real or actual situation differs from ideal. The area between the line that indicates the absolute equality of income distribution and the Lorenz curve reflects the degree of income inequality. The larger this area, the greater the degree of income inequality. If the actual income distribution was absolutely identical, the Lorenz curve and the bisector coincided gap would have vanished, that would only direct OE.

Moreover Lorenz curve deviates from the line OE, the higher the degree of differentiation of cash income. Therefore, we can say that income inequality is characterized by the degree of deviation from the Lorenz curve bisectors angle coordinates. This deviation can be measured through the ratio of the area between the curve shapes Lorentz and direct OE to the area of all triangles OEJ. This figure is calculated that in the literature titled the concentration ratio of income or Gini coefficient, which is called the concentration index of income. [12, p.. 201]

Gini coefficient shows the character of distribution of the entire amount of income between different groups. For even distribution of income in society Gini coefficient is 0, the higher the degree of polarization of society by income, the closer this ratio to 1.

Gini coefficient G calculated by the formula

G = (S OABCDE) / (S OEJ) (1)

The coefficient depends on how small groups analyze the researchers. Ideally, the Lorenz curve should actually look like the curve, rather than broken lines (Fig. 2.2).

Gini coefficient in Ukraine in 1997 was 0,71-0,74, while in Sweden - 0.304, USA - 0.466. It appears that the social stratification in Ukraine has reached a critical level. To reduce social tension in society, to change the situation of the living wage as a basic element of social guarantees. [12, s.203]

Total income generated from various sources and redistributed among families depending on their size and composition. Personal income distribution measures the distribution of income among families. Personal income distribution differs significantly uneven, which can be measured based on the methodology - Lorentz-Dzhinni.

Distribution of personal income in the community

Income distribution - a stage play, which occupies an intermediate position between production and consumption. Implemented market products into a cash proceeds. After removing from it the cost of production is consumed cash (gross) income, or the newly created value in the distribution of which there are vertical relationships: between the state and member of society, between the state and now, between now and the employee between the owner of the means of production and employees, and others. These relations are different forms of income, each with its economic purpose.

Objectively, income distribution depends on the newly created value consists of the desired product which is used to meet the needs of direct producers, and an additional product to meet the individual needs of entrepreneurs and the general public needs (expansion of production, social and spiritual spheres, creation of reserves).

First is the distribution of income between the state and now any form of ownership. The object of this distribution is profit - the difference between the price at which the company sells its products and its cost. [8, p. 244]

Profits of an enterprise is divided into two parts: one is in custody of the State, the other remains at the disposal of the company.

However, if the state does not have sufficient funds, it negatively will affect the scientific-technical and economic progress of society. The development of fundamental science, new areas of technological progress, solving global problems are only possible if part of the state and its centralized funds.

Thus, an important principle of income distribution is to establish the optimum ratio, which created a favorable condition for the convergence of economic interests of society and enterprises.

Since, the total social product in kind consists of the means of production (tools and items of work) and means of subsistence. Means of production allocated to production and living facilities - to private consumption. [8, s.252]

Equally important is the distribution of the fund life. It covers, as a rule, the bulk of the whole product that is formed on the basis of necessary and surplus product. In the system of social reproduction required product is formed in the production process, through the phase distribution, exchange and consumption. The main functionality of the product is necessary reproduction of the labor force. Only at the stage of consumption necessary product gets its complete form as a foundation of life, that serves as commodities and services that provide direct personal consumption.

Thus the process of transformation necessary product in the life fund assets. After the necessary product sales take the form of cash, which goes to the employee as salary payments from social consumption funds. Then the employee their cash income on the market (exchange) turns on consumer goods and paid services. In addition, it receives public funds through the consumption of free services. And only after completing an entire stage of consumption necessary product takes the form of life fund assets.

It appears that the required product series takes many forms, acts as a natural product, income, goods and services, the foundation of life is the only form of commodities and services directly consumed by workers and their families. In other words, it is necessary and part of the surplus product at the stage of consumption.

There are also income not directly related to the assessment results. This social consumption funds. They can come to the public through the state budget and through a special fund (in Ukraine they are called Social Development Fund).

Finally, there is income from property - dividends from shares, interest from a share of the property, interest from bank deposits, investments in real estate and others.

One (the majority) of the income is converted (mainly through the market) in consumer goods population, and the second (due to the accumulation and investment based on market relations) in the means of production for expanded reproduction, growth. [6, p.23]

For any society paramount motivation in economic activity. Motive means the incentive reason on any act. In this case, that makes the agents in economic activity, the main content of which is a vital means of production (material goods and services).

Motivational mechanism of economic activity - the concept is difficult. It includes the purpose of motivation, the subjects of industrial relations and facilities management, economic interests and incentives to work, the basic principles of the mechanism.

The primary motive for people is their livelihood needs: food, clothing, housing and so on. It has long been known that there is no need of production and consumption reproduces the need of life.

The need to satisfy their needs makes people act, engage in active cooperation not only with nature but also among themselves. So, there are social relations of production in which important driving force is a motivational mechanism of economic activity.

The purpose of motivation - a reproduction of subjects manufacture idents relations: employees, workers, entrepreneurs. If there are no normal conditions for reproduction, the motives of a particular economic activity disappear.

The basis of material incentives to work is a system of income distribution. This basis depends on the ownership of the means of production. Economic stimulus, usually reflects the dependence of the Oder-tomers with the product in the personal instruction of the subject from the results of his work or economic activity. [6, P.29]

Economic incentives are a means of establishing the relationship between interests and act as a form of various types of economic interests. To obtain wage workers have a pure product, yield, to realize the economic interest of the enterprise.

Motivation activities not only begins with the proclamation of ownership, experience shows that implementation of the latter depends on the proportions of income distribution, plays a significant role in this state.

Announcement of a form of ownership, including private, not enough to create motivation of economic activity. With the unbearable taxes can remove a significant portion of revenues and undermine the motivation for economic activity. Therefore, motivation and psychological conse mechanism of activity depends on a fair income distribution, which should be based on the following principles: income for work, including business, industrial, land, capital;

Depending on the main part of the proceeds of the results of work, level of economic activity of the economy;

amount of income taking into account the development of productive forces should ensure normal (socially necessary) conditions of life;

sustainability of the income distribution;

no leveling in the income distribution;

unacceptability of excessive income differentiation in society, respect for social justice. [5, s.305]

In a socially oriented market economy are taken into account significant differences in the abilities of workers. This means, firstly, the creation of equal conditions for their development, and secondly, to provide work skills, and thirdly, the necessary conditions for high performance at work.

State regulation of distribution income population

government income social policy

The problem of income distribution is perpetually in economic theory. Understand the importance of social regulation and addressing the social inequalities and promote social justice theory of the late nineteenth and mid twentieth century. "Theory" welfare "Pigovian A.," A new theory of welfare "V. Pareto, labor representatives of the" social school "(Dzh.Tobson , Dzh.Koul, G. Myurdal, L. Erhard, F. Perry, T. Veblen, Dzh.Helbreyt etc.).. Made their criticism of the neoclassical theory of prices and incomes, to develop proposals to enhance the social policy to alleviate social contradictions and implement "managed evolution" promote public awareness of the need to harmonize the principle of market freedom of social regulation, the establishment of the welfare state in developed countries. Ensuring the welfare of citizens requires the effective functioning of the productive forces, state regulation of economic and social activities, redistribution of national income in favor of the least wealthy, non-competitive labor market groups. Social inequality threatens social stability and reduces economic efficiency due to low competitiveness of consumers.

State regulation of income is a component of social policy. It is a system of measures and rules of the legislative, executive and supervisory nature and aimed at creating conditions conducive to the normal reproduction of the labor force and its development, reducing the social tension.

State regulation is redistribution of income through their state budget through differential taxation of different groups of recipients of income and social benefits. Such regulation contributes to poor revenues, provides for eliminating disparities related to unequal production factors regulating employment, reducing social tensions and so on. The policy proceeds based on certain principles enshrined in the Constitution and other legislative acts.

They are as follows:

social justice;

social partnership and solidarity among all segments of the population;

right to work and worthy of reward;

indexation of income;

differentiation of wages;

right to professional associations;

economic feasibility. [16, P.43]

The distribution of income among the population has a direct impact on the use of resources work. Firstly, in the case of large differences in differentiation and total them in the poorest segments of the population below the subsistence wage increases secondary, unregulated and illegal employment because of the need to have at least a minimum livelihood. Thus, a layer that more citizens, the greater the volume and proportion of listed negative effects on the labor market. Second, the labor market with great differentiation of incomes are more vulnerable in relation to discrimination on the part of entrepreneurs, workers' rights violations, failure of collective agreements for fear of losing work in case of disagreement and complaints. Thirdly, the increasing number of retirees and young people who work. However, this differentiation may recover to some extent the mobility of the workforce - especially among young people. [11, p.. 230]

More profitable groups pay a significant portion of their income to the state budget and the poor segments of the population pay taxes at a low discounted rates. This measure leads to a reduction in the gap in income. Secondly, due to revenues from profitable income groups in the State will pay the increased transfers to the poor layers that reduce the differentiation further. Thirdly, it is strengthening the fight against shadow incomes. Move them into the legal, again, increase revenue with all positive results for a layer of low income brackets. [11, p.. 251]

Effectively organized labor markets and productive employment mainly provides normal and fair working and differentiation of the population by income. Effectiveness of the labor market is determined by:

development of competition between employees for better jobs and between employers for more skilled workers;

Relevance for the workforce of its reproductive function (minimum wage may not be less than the subsistence minimum);

constant efforts to reduce the gap between labor supply and demand for it;

constant balance between commodity and money masses.

In modern conditions it is impossible to accurately assess the existing differentiation of the population by income, based on official statistics, which captures only the differentiation of blatant revenue. In forming the population of Ukraine affected by shadow economy, which is estimated at almost 40% of GDP [1, p.7].

Differentiation of income lost economic sense, since it is based on the level that ensures even the reproductive function. On the other hand, the growing differentiation of unearned basis, which often does not fit into the legal field. Traced the tendency to explain the operation of medium and rich on the basis of miles of ownership (assignment) the means of production, not in the form of property income, as is customary in the world.

Conclusion

In terms of income differentiation in society caused poverty, which poses a threat to the normal process of reproduction of society, poverty rate is defined subsistence level, which varies due to changes in market prices of goods and services.

Inequality in income members of society and their families can adjust the state through tax policy: higher incomes should be taxed higher rates, and revenues that do not exceed the subsistence level, are exempt from taxation. In addition, the state should provide targeting assistance to citizens who have low incomes, so that these people were able to form a certain property, were able to form and accumulate some income. To do this, government agencies should establish special programs which include measures to increase savings in the population, promotion contracts of life insurance, provision of citizen participation in development and income distribution companies.

As part of the state regulation of economy is the policy proceeds. In a market economy it is in line with competition policy and economic stabilization policy.

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