A Study On Regional Income Gap Of Rural Residents And Its Determinants

In the course of reform drive starting from 1978, alongside rapid increase of Chinese national income, the pattern of income distribution has evolved from serious egalitarianism during the planned economy to serious income disparity at present. The problem of income gap of rural residents has become rather prominent. Especially, the inter-regional income gap of rural areas has widened by 2.8 folds from 1981 to 2002, a growth much higher than that of income gap between rural areas and urban areas as well as inter-regional income gap among cities and towns. As a result, many studies on income gap of Chinese rural residents have been carried out by scholars at home and abroad from various viewpoints. Honestly speaking, these studies provide us many discerning observation and explanation concerning income gap of Chinese rural residents emerged from rural reform, greatly enriching our understanding in the aspect. However, because most scholars focused on macro-income gap between regions and provinces, few scholars paid their attention on the problem of income gap of rural residents within a single province. It is obviously imperfect.Jiangsu Province, as an economic powerhouse in eastern coastal region, has made remarkable achievements in various social and economic undertakings. At the same time, like most regions in China, it is facing constriction of deep-rooted contradiction in the further development, especially the widening of regional income gap of rural residents, sluggish pace of constructing a well-off society in rural areas. Undeniably, appropriate regional income gap of rural residents plays a positive role in promoting regional socio-economic development, and due inter-regional income gap is a guarantee for economic efficiency. Advantage cannot exist without gap. As a consequence, so-called inter-regional comparative advantage cannot be realized. However, the widening of regional income gap can bring about many problems for underdeveloped regions such as outflow of much-needed investment capital, exodus of professionals, resulting to further stagnation of regional economy and vicious circle. Therefore, we should have enough understanding on socio-economic effect of undue widening of regional income gap of rural areas. We have no reason to stand passively. Rather, we should actively regulate and perfect policy and objectives of regional development to control inter-regional income gap of present rural areas in Jiangsu Province to a certain scope. Inter-regional gap should facilitate, rather than hinder, inter-regional economic development. In the economically developed Jiangsu Province, unbalanced pattern in terms of economy, culture and society has badly obstructed realization of constructing a well-off society in an all-round way. Under the circumstances, it is of great actual significance to carry out research on regional income gap of rural residents. Meanwhile, the research is of strategic importance to such aspects as realizing transformation of society as a whole in Jiangsu Province, translating an economically big province into an economically powerful province, accelerating construction of a well-off society in rural areas in Jiangsu Province, ensuring sustainable, rapid, healthy socio-economic development of the province as a whole.On basis of previous research by other scholars, the dissertation tries to take Jiangsu Province as an example to systematically and profoundly research regional income gap of rural residents of Jiangsu Province and its determinants. It aims to seek a breakthrough for coordinated development of rural region of Jiangsu Province, to determine guideline, policy and measures for the development so as to ensure realization of the objective of constructing an all-round well-off society in Jiangsu Province.The main contents and basic conclusions of the dissertation are as follows:Firstly, the dissertation makes analysis on historical circumstance and causes of income gap of rural residents in Jiangsu Province. As early as the period of Southern Song Dynasty, the superiority of south over north in rural areas of Jiangsu Province had been formed. From birth of New China to eve of reform and opening-up drive, income of rural residents was characterized by the pattern of slow and balanced development. Regional gap was not so striking. Since reform and opening-up drive, rural economy of Jiangsu Province has developed in an unbalanced way. Income gap of rural residents in southern part, intermediate part and northern part of the Province has witnessed the process of widening, de-widening and re-widening. Generally speaking, however, absolute gap has been widening. The evolution of income structure of rural residents of Jiangsu Province bears obvious regional mark. Apart from ever widening general income gap, the gap of structure of income sources of rural residents is even more remarkable, which is mainly manifested in salary income and domestic operation income. The income gap of rural residents in Jiangsu Province is principally caused by the following factors: constraint of locality and traffic; influence of human resources and household burden; fetter of informal rules in terms of cultural tradition, ideology, etc.; differentiation of agricultural industrialization; degree of perfecting of land circulation and speed of agricultural development; inequality of growth of rural grassroots organization.Secondly, the dissertation systematically investigates regional income gap of rural residents of Jiangsu Province from 1984 to 2005.Then, it classifies regional income gap of rural residents of Jiangsu Province using Theil index, the variance coefficient and Gini coefficient, analyzing origin of regional income gap of rural residents. At last, it orderly analyzes a convergence, absoluteβconvergence and conditionalβconvergence, further using judging methods of a convergence andβconvergence. Main conclusions: Studies from three different levels indicate that the absolute regional income gap of rural residents of Jiangsu Province demonstrates the ever widening momentum, while regional relative gap is generally on the average, showing the momentum of increase with fluctuation in recent years. In the composition of regional general gap, the determinant is always inter-regional gap including gap among southern part, intermediate part and northern part of Jiangsu Province as well as gap among 13 cities. Income gap of rural residents is decomposed in accordance with decomposing formula of Gini coefficient. Economic factors and demographic factors affecting income gap of rural residents in three major regions and thirteen cities are investigated respectively. In any major region or city, Gini coefficient in different years comes from contribution of economic factors whereas contribution of demographic factors is negative in every year with its absolute number being fewer. Income of rural residents of Jiangsu Province from 1985 to 2005 (three levels) does not showσconvergence as a whole, while income of rural residents of Jiangsu Province indicates apparent absoluteβconvergence in most periods. However, it is not ideal in terms of estimating effect from models. There are conditional convergence at three levels of Jiangsu Province including 64 counties, 13 cities and 3 major regions. Furthermore, there are also conditional convergence within regions such as southern part, intermediate part and northern part of Jiangsu Province.Thirdly, the dissertation analyzes regional income mobility of rural residents using mobility matrix, income mobility index and P index. Main conclusions: The income mobility of rural residents of Jiangsu Province becomes diminished, and regional rural income of Jiangsu Province is void of mobility. From trend of time, all three levels show some of fluctuation in terms of functions of regional income mobility of rural residents on regional income gap. Fourthly, aided by software of SPSS13 and Eviews5.0, employing such methods as analysis on main composition and H-P filtration, the dissertation makes co-integration, Granger-causality and impulse response on economic development and regional income gap of rural residents of Jiangsu Province. It also explores the possibility of long-term, stable co-integration and causation between economic development and regional income gap of rural residents of Jiangsu Province as well as their interplay process and direction. Main conclusions: Experiment of co-integration and Granger-causality shows that in any part of Jiangsu Province including 64 counties, 13 cities and 3 major regions, there are long-term, stable co-integration and bilateral causality between economic development and regional income gap of rural residents of Jiangsu Province, which have soundness. Further impulse response indicates that although economic development is also a cause for regional income gap of rural residents, economic development will further widen the gap in medium-and-long-term. In return, the gap will play a passive and destructive role in economic development. The ever widening gap in recent years in Jiangsu Province poses a threat to economic development. It is necessary for governments to take various measures to narrow the gap and realize the objective of common prosperity. Governments should properly handle the relationship between economic development and regional income gap of rural residents. It is unwise to merely consider economic development at present while neglect long-term stability and prosperity in rural areas.Fifthly, the dissertation makes through models empirical analysis on tendency and determinants of income gap of rural residents of Jiangsu Province.Main conclusions: In mathematic sense, the tendency of Gini coefficient of regional income of rural residents of Jiangsu Province does not show the character of Williamson inverted U-shaped curve, which indicates that along with raise of income level, regional income gap of rural residents will not necessarily fall without any conditions. Increase in agricultural expenditure, non-agricultural employment, and highway density can widen the gap, while increase in educational expenditure, capital intensity can narrow the gap.Sixthly, the dissertation studies the experience of developed countries in reducing regional gap of rural residents. The enlightenment from the study is listed below: to take various measures to support agricultural development, to improve quality of farmers, to greatly raise income of farmers engaging in agriculture; to develop agricultural industrialization; to aid backward regions to promote regional coordinated development; to push forward mobility of rural labor.