The Study On The Income Gap Of Urban Residents During The Process Of Urbanization In China

After the reform and opening up, China’s population floates increasing gradually.and the rural population goes into the urban for a job, which greatly promotes the process of China’s city. But our residents income inequality is becoming a serious problem in the process, the urban income inequality is also rising as a part of the income inequality. Compared to the rural income inequality and the income inequality between urban and rural areas, the urban income inequality rise faster and have a more and more impact on residents’income inequality. There are a large number of poor people in the city and the urban income gap attract people’s attention. When the rural income gap and the gap between the urban and the rural gap have changed by the role of the process of city and state’s support.In the process of city, a large number of rural labor force goes into the city, which may bring an impact on wage and employment to the city labor market, thereby affecting the income of urban residents and expanding the urban income gap. But some scholars have pointed out, to some extent, the segmented urban labor market in China has protected the urban labor market and reduced the impact of external buffer. what kind of impact do the population flow on the urban labor market in the process of city?How the urban income gap change affected by the process of city? The paper mainly analyses on these issues. The full text is divided into seven chapters:the first chapter is the introduction part including the research problem, the background and the significance. The second chapter is the theoretical basis and literature review. The third chapter describes the condition of our country city and income gap and points out the importance of urban income gap in residents’ income gap. Constructing the theoretical model and quantitative analysis on the influence of income gap by the process of city in chapter fourth. The fifth chapter quantitative analysis the informal employment and income gap. The sixth chapter summarizes the social and economic impact of the income gap, lists the experience of foreign countries to narrow the income gap. The seventh chapter is the conclusion of the paper and the corresponding policy measures.The main conclusions of the paper are as followes:First, the importance of urban income gap is on the rise. As the population How and the city process, the urban income gap have more contribution to the residents’ income gap.Second, the urban income gap is enlarged at first and then narrowed. influenced by the process of city. Large rural labor is employed into the city, which impact more on the secondary of labor market and the local labor force in the secondary urban labor market tends to reduce wages rather than withdrawal from the labour market to deal with the impact. So the income gap between urban between the two markets expandes which leads to the rise of urban income gap. When the rural labor force into the city declining, the secondary labor market wage in citiy begins to rise rapidly, closing to the wage in senior labor market, which narrows the urban income gap.Third, mathematical model and econometric analysisin the fourth chapter show that, Kuznets inverted U hypothesis exists in the city modernization. There are two different kinds of effects in long-term and short-term on the urban income gap by the urbanization. In the short term, the urbanization will increase the urban income gap, but long-term plays a reduced role. From the mathematical model we can get two paths to narrow the urban income gap, that is,expand the informal sector or the formal sector can all reduce the urban income gap. But because the formal sector is difficult to remain open and expand when one country is in the low stage of economic development. Therefore, the role to narrow the city income gap by expand the fomal department is only a theoretical path.Fourth, we find urban residents by Quantile Regression and counterfactual analysis using the prior year of CHNS data:the effects of informal employment on the urban income gap is still in the rising process in China now. The proportion of the informal employment and the urban income gap are all on the rise in the two periods. However, counterfactual analysis showes that different cause of urban income gap between the two periods:the first period, the income gap within the infonnal sector cause the expansion of urban income gap, while the second period, the income gap between the fonnal sector and the informal sector cause the expansion of urban income gap.Fifth, we can outline the complete process of the effect of the informal sector on China’s urban income gap, that is phase of the urban income gap caused by the infonnal sector, the income gap expansion between the fonnal sector and the informal sector, the income gap narrowing between the formal sector and the informal sector. Because our country city refonn is not synchronized, which causes different income rate between the two sectors and different stages of income gap process. Although the current CHNS data only reflect the situation of the first two stages.we can predict that the stage of narrowing urban income gap. Because the informal sector labor gradually reduce and the income rate of the informal sector will rise again, while the formal sector income slowdown by a series of regulatory policy in the country with the passage of time, they work together to narrow the income gap between two interdepartmental gradually.