Research On The Influence Of Human Capital On The Urban-Rural Income Gap

Since the reform and opening up,though residents’ income level in China has increased,yet not sharing the achievements of development equally,and the Gini coefficient is consistently higher than the international warning line.Among them,the urban-rural income gap contributes a lot.The low-income groups,especially the majority of poor people live in rural areas.Therefore,narrowing the urban-rural income gap is of great significance to mitigating the current gap between the rich and the poor.The theory of human capital believes that human capital can not only promote economic growth,but also increase personal income,and imposes a slowing effect on the inequality of income distribution.This paper argues that with the continuous development and improvement of market economy,the income of residents will be highly dependent on their labor supply,while labor supply also implys individual human capital.Based on this,from the perspective of human capital,this paper studies its role in the formation of urban-rural income gap in China,and puts forward targeted policy recommendations.First of all,this paper systematically reviews the relevant theories of human capital and urban-rural income gap,and summarizes the function mechanism of human capital’s impact on urban-rural income gap,including compensation effect,spillover effect and dislocation effect.On this basis,we briefly review the above function mechanism and summarize its essence.And based on this essence,we construct the theoretical model and discuss the relationship between human capital and the income gap between urban and rural areas.The main conclusions of the model are as follows: as to increase the rural human capital stock,if it can stay in the rural sectors,the urban-rural income gap will decline;if it flows into urban sectors,the urban-rural income gap will widen;simply increasing the urban human capital stock will increase the urban-rural income gap.Secondly,this paper describes the current situation of China’s human capital and urban-rural income gap,and makes an empirical analysis based on this.According to the theoretical model,this paper examines the current situation of human capital from the perspective of investment and stock,and meanwhile measures the urban-rural income gap.On this basis,this paper empirically analyzes the dynamic relationship between human capital and urban-rural income gap based on the Dynamic Panel Data Model,Panel Vector Autoregressive Model and Spatial Dubin Model.And this paper mainly studies three issues: whether there is ―Matthew effects‖ in urban-rural income gap;whether there is spatial autocorrelation in urban-rural income gap and how human capital investment and stocks affect the urban-rural income gap.Finally,this paper gives main conclusions and puts forward related policy suggestions.The main conclusions of this paper are:(1)There is strong ―Matthew effect‖ and spatial autocorrelation in the urban-rural income gap;(2)Human capital investment and stocks are important factors influencing the urban-rural income gap.On urban aspects,both have negative effects on the urban-rural income gap,but the former tends to stabilize quickly,while the latter has a very small coefficient value.On rural aspects,both also have negative effects on the urban-rural income gap,however,the former has a positive effect in the short term.The above conclusions are somewhat different in the ―East,Central,West‖ regional aspects;(3)The urban-rural income gap plays a positive impact on the urban human capital and urban-rural human capital gap,and has a negative impact on rural human capital.Based on the main conclusions,this paper puts forward relevant policy suggestions from four aspects: financial support,industrial optimization,household registration reform,and financial development.