Human Capital Studies On Urban-Rural Dual Economic Disparity

In China, the residents in rural areas and urban areas have had unequal rights in human capital investment in many fields such as education, training, health, migration for a long time, which .has caused a serious shortage of human capital in rural area. In addition, although the human capital in rural areas is limited, the phenomenon of spillover is very serious in the absence of basic conditions for giving full play to its ability. To a great extent, this has restricted the development of rural economy and widened the income gap between city and countryside. The dissertation makes a study on human capital of the urban-rural dual economic disparity , adopting horizontal and vertical integration and regression analysis integration and interdisciplinary research method, following the ideas of Western development economists such as Lewis William Arthur, Ranis-Fei, D.W. Jogenson and Todro, and combining Chinese urban-rural dual economic practice with theories in west economics, development economics, regional economics and other relevant knowledge to carry out a deep research on the urban-rural dual economic disparity. This research is useful in expanding the areas of economic studies, and providing a theoretical explanation for the urban-rural dual economic phenomenon and a new analytical method for the formation of integration of urban-rural economy; And practically it is useful in building harmonious society and promoting coordinated growth of city and countryside.The dissertation includes mainly five aspects: First, it makes human capital studies on the urban-rural dual economy model, analyzes the loss of human capital factor in models such as Lewis William Arthur model, Ranis-Fei model, D.W. Jorgensen model and Todro model, discusses the characteristic of dual economy and human capital, and establishes the starting point of the logic analysis on city and countryside dual economic disparity. Second, it constructs human capital investment model and establishes the theoretical pattern for study. Starting with the main body of human capital investment—governments, families and enterprises, by doing the model research on the income of human capital investment, earning ratio, manpower capital and the income and the human capital ability, the dissertation demonstrates that the balanced human capital investment conditions is that expected earning ratio equals to human capital investment cost discount rate, namely the marginal income is equivalent to the marginal expenditure. Third, the author researches on human capital income gap and investment disparity between the urban and the rural areas and suggests that human capital investment in rural areas should be raised in order to increase the income of peasant families. The analysis of human capital condition and average annual incomes per urban and rural resident in various regions of the country in 1995-2005 shows that the human capital is increasingly becoming the key factor that determines the income level. The results of Gini coefficient measure and Theil index decomposition prove that the gap between urban and rural areas on manpower capital investment has been widened increasingly and the gap of investment in health care is far wider than that in education between urban and rural areas froml995 to 2005, but the manpower capital investment gap has been narrowing last two years. To implement policies of increasing rural human capital investment, increase rural education investment, and improve peasants' health and nutrition and medical care condition in rural areas will greatly improve the productivity and income of peasants. Fourth, the author studies urban-rural human capital overflowing effect. Based on the research on the interactions between economic growth and urban-rural location, the dissertation explains that human capital overflowing has expanded economic disparity between urban and rural areas. Finally, with deep research on birth rate level, human capital stock level, accumulating trend and construction of small towns and cities, the dissertation contends that we have to implement the policies to increase investment in manpower capital of rural population and have policies and institution innovated unceasingly to control and narrow the existing income gap between urban and rural areas.The conclusions of the dissertation are as follows. First, only by enhancing rural area manpower capital investment unceasingly, can the labor force migrate completely to the industry department so as to remove dual structures and realize the balanced development of industry and agriculture. Second, the return on investment of the human capital is higher than the return on investment of material capital. Human capital has significant effect on the distribution of social wealth, personal income. The more the investment in human capital, the higher the income will be. Third, the human capital factor has more and more influence on residents' income, but no obvious influence on income gap between the urban and rural residents, which is closely related to the Chinese system. The amount of capital investment increases year by year, the gap is also widening, the urban-rural gap among western, middle and eastern areas, expenditure gap in the urban-rural healthcare item is obviously wider than the gap in culture and education. Fourth, The human capital runoff effect in urban area is mainly the inner overflowing, but the rural area human capital runoff effect is outside overflowing. The asymmetric flowing characteristic of human capital makes cities develop with quicker speed, economy increases with the quickest speed; but the innovation speed in rural area slows down because of inferior infrastructures, and the increasing speed of product variety is lowered to the minimum, the gap between city and countryside widens further. Fifth, human capital stock is the main factor that determines the peasant family income increase. With high human capital store amounts, it will be easy for people to master advanced agricultural technology. The improved productivity of the members in agriculture household will in turn increase peasant's income. Finally, to bridge the income gap between urban and rural areas ultimately will depend on the similarities in birth rate, human capital stock level, the fast development and the accumulating rate between urban and rural areas.The innovations of the dissertation are as follows: First, the research perspective innovation. The dissertation makes a systematic study on the urban and rural economic disparity in China from the human capital perspective, combining China's urban and rural economic development practice with western economics, development economics, and regional economics, and other related subjects. Second, research content innovation. The dissertation contends that if human capital investment between urban and rural areas is imbalance in economic development process, it will lead to dual structures of human capital and education on the labor market segmentation, cause a vicious cycle of economic development, further widen urban and rural economic gap in terms of human capital; proposed that human capital as a factor of production is not only for the benefit of investors, but also bring progress and development to the whole society; demonstrates that the different level of knowledge, skills that workers master will lead to different functions of human capital to economic development and the increase of residents' income; through constructing farmers' household income model, the framework of the return rate of education in rural areas and regression analysis of education investment in the rural areas further proves that there is a positive correlation between the stocks of human capita and income and that there is a negative correlation between the stocks of human capita and workers' income gap; establishes human capital overflowing effect analytical framework; with the research on the interactions between economic growth and urban-rural location, the dissertation explains the asymmetrical features of human capital flowing in urban and rural areas which widens the gap between urban and rural areas; suggests stabilizing the rural human capital, speeding up the construction of small towns and other policy measures, and gradually narrowing the gap between urban and rural areas to achieve integration of economy, integration of production, lifestyle and values of urban and rural residents. Third, innovation of application of study methods. The dissertation makes a deep research on urban and rural dual economic disparity from the perspective of human capital. In order to study the problem clearly, interdisciplinary research methods are adopted, and related theoretical knowledge such as sociology, political science theory is applied.