Research On The Evolutive Path Of The Income Gap And Its Reasons Between Urban And Rural Residents In China

Since 30 years of reform and opening up, the income level of the urban and rural residents has been on the rapid increase. In 2008, urban resident disposable income has become 15871 yuan, and rural resident net income has become 4761 yuan. Camparing with 1978, each has increased 45.96 times and 35.64 times. It means the fact that urban and rural residents share the achievement from economy rapidly increasing. However, in the course of economic trasition, the income gap between urban and rural residents has been expanding with fluction step by step. Since 2002, urban-rural income ratio has gone beyond 3 and unceasingly climbing. Though the government has put some policies in practice, which aim to reduce the income gap between urban and rural residents, the expanding trend has not been turned back. The main reason is that the evolutive procession of the income gap between urban and rural residents has some complicated historical and realistic reasons, which root in the long-term procession of economic development and can not be completely eliminated in the short-term. To availably reduce the gap, it is necessary to research the intricate evolutive path of the income gap and its reasons between urban and rural residents and put forward some feasible suggestions. The emphasis of this paper is just the evolutive path of the income gap and its reasons between urban and rural residents.This paper bases on economics, development economics, institutional economics, and human capital theory as academic foundation, and synthetically applies statistic and econometrics analytic methods, in particular dynamic methods, positive with normative analysis, as well as some computer software such as Eviews and Spss.This paper is composed of seven chapters excepting the preface. The preface introduces the background and signification of this paper, the main research methods, the main research content and frame, as well as its innovation.The first chapter is a brief review of the overseas and native literature as an academic base. It carefully reviews the theories about economy increasing and income distribution, and introduces the status quo of the research on the income gap between urban and rural residents in China, which to charify the weakness of the fomer research and the essentiality of this paper. The second chapter includes a statistical description and an empirical research on the evolutive track of the income gap between urban and rural residents. At first, it makes use of a large numbers of full and accurate data to describe a multidimensional and dynamic trend of the income gap between urban and rural residents. The research of this part finds that the income gap between urban and rural residents is continuously enlarging and its contribution to the whole income gap is strengthening, that the urban-rural residents comsuption ratio is all along above of the urban-rural residents income ratio, and that the inequality of the wealth distribution between urban and rural residents is more serious than the inequality of the income distribution and presents an accelerating trend. Secondly, the empirical research on the evolutive track of the income gap between urban and rural residents includes regional synchronization, regional convergence, and Kuznets "inverted-U" hypothesis. The research indicates that regional synchronization and convergence is existent to some extent, so the following text can suppose that the income gap between urban and rural residents is homogeneous. In addition, the research reveals that "inverted-U" hypothesis between the income gap and economy increasing is existent in the whole country, the east region, the middle region, and the west region.The three chapters from the third to the fifth explain the evolutive path of the reasons for the income gap between urban and rural residents. It is the core of this paper. Firstly, the third chapter describes the phases charaters of the dual economic structure evolving in China, then in detail analyzes the inherent mechanism of the dual economic structure inducing the income gap between urban and rural residents by three paths, including urban-rural comparable labor productivity rate, urban-rural labor flow, and primary distribution. Secondly, the forh chapter verifies the validity of the institution transition in the income distribution field, and separately illustrates the institutional path to form the income gap between urban and rural residents from micro-economic and macro-economic aspects. Moreover, according to the ideas from the game theory, it demonstrates that the urban-biased institution transition path is basically synachronous with the evolving track of the income gap between urban and rural residents. Thirdly, based on the human capital theory, the fifth chapter explains the endogentic human capital invest path to induce the income gap between urban and rural residents, and proves the bidirectional effect mechanism between the urban-rural human capital invest and the income gap by the VAR model.The sixth chapter analyses whether the income gap between urban and rural residents produces the effect on the economy increasing. The purpose of this part is to clarify the effect has a fundamental change, and that it is necessary for the government to lessen the income gap between urban and rural residents.The seventh chapter is the policy proposals part, and it is the summarization and application of the whole study. Firstly, it clarifies the aim to reduce the income gap between urban and rural residents. Secondly, according to the evolutive path of the income gap and its reasons between urban and rural rensidents, which has been demonstrated by this paper, it puts forward some feasible policy proposals from three aspects, including the harmonious development path between urban and rural areas, the policies in favor of the rural residents, as well as human capital investment.