Research On The Effect Of Urbanization On Rural Poverty And Inequality

The transformation of a rural economy based on agriculture to an urban economy based on industry is a typical feature of the process of economic development.With the concentration of labor,capital and market in urban areas,the agglomeration effect produced by urban expansion has strongly promoted the development of urban economic and labor productivity.More importantly,the economic growth effects of urbanization will also radiate to the surrounding rural areas,which will have a profound impact on the mode of production of rural residents and rural economic transformation.In the context of China's urbanization,rural areas have generally formed a "semi-industrial and semi-agricultural" structure,and most farmers rely on family farms for planting and non-agricultural work to maintain their livelihoods.This will help break the "involution" of agricultural production,and at the same time help the rural economy to jump out of the low-level growth trap characterized by "over-densification" and improve the living standards of rural residents.Therefore,China's urbanization process plays an important role in rural economic development.The sharp decline of the incidence of poverty and the increase of income inequality are the two most typical characteristics of China's rural economic development.As far as rural poverty is concerned,after the completion of building a moderately prosperous society in all respects and the elimination of absolute poverty in 2020.absolute rural poverty under the current poverty standards will be basically eliminated.But the elimination of absolute poverty does not mean the complete settlement of the poverty problem and the end of the anti-poverty project.China still has a long way to go to get rid of poverty with high quality and high standard.The problem of relative poverty will gradually become prominent in the future and will accompany the whole process of socialist modernization.In terms of the relationship between urbanization and rural poverty,urbanization and the incidence of rural poverty are inversely related in time dimension.While in spatial dimension,the higher urbanization rate of provinces corresponds to the lower incidence of rural poverty,this leads to the core issue of this paper:is there a causal relationship between urbanization and rural poverty reduction?More importantly,what are the mechanisms by which urbanization affects rural poverty?The answers to the above questions not only provide an important reference for the path choice of the strategic goal of urban and rural development,but also play an important role in the formulation of poverty reduction policies in the new era.As far as income inequality is concerned,top 10 percent income share in rural areas in China rose from 26.7%in 1978 to 38.3%in 2015,while the bottom 50 percent share dropped from 29.7%in 1978 to 20.3%in 2015.China's rapid economic growth in the past few decades is closely related to the development of urbanization.Is the rise of income inequality among rural residents the inevitable result of the rapid development of urbanization?This is the second issue that this article is concerned with.To study whether there are differences in the benefits of rural residents in the process of urbanization,is not only related to the harmony and stability of rural society,but also has some enlightenment for the formulation of policies to narrow the rural income gap.At the same time,it is closely related to the poverty reduction effect of urbanization.The reason is that income gap is another aspect of poverty and income distribution is an important factor affecting rural poverty.Regarding the issue of income inequality,some scholars have pointed out that income inequality itself does not necessarily mean social injustice.Income inequality belongs to outcome inequality,and the public cannot accept the opportunity inequality compared with the outcome inequality.Intergenerational mobility describes the correlation between the economic and social status of parents and children in a family,and is an important indicator of social justice.If the intergenerational mobility of a society is low,it means that the society has not given equal development opportunities to individuals from different family backgrounds,which will lead to intergenerational transmission and persistence of social inequality.The Gatsby Curve shows that there is a correlation between horizontal income inequality between regions and intergenerational transmission,and economic growth dominated by urbanization and industrialization has brought about a substantial increase in average income.The high inequality seems to imply lower intergenerational mobility in rural China.However,the conclusion is not so simple.The reason is that economic development can significantly promote intergenerational mobility.This leads to the third question that this article is concerned about:profound structural transformation and social changes have taken place in the process of urbanization,so what impact does urbanization have on rural intergenerational mobility?The issue of intergenerational mobility is also closely related to poverty reduction in rural areas.Therefore,the closely related question is,will urbanization help to promote individuals from low-income families to break through the constraints of family background,break out of long-term poverty and break the rigid class?Therefore,the closely related question is,will urbanization help to promote individuals from low-income families to break through the constraints of family background,break out of long-term poverty and break class solidification?This article focuses on the analysis of the above three aspects.In terms of research methods,based on the relevant theories of economics and the frontier empirical research at home and abroad,this paper uses the methods of theoretical analysis and empirical analysis.The main research contents and conclusions are as follows:First,the mathematical model analysis of the impact of urbanization on the income and poverty of rural residents.Based on the realistic background of China's urbanization,a theoretical model of the impact of urbanization development on rural poverty is constructed from the perspective of rural residents,and the potential mechanism of urbanization affecting rural poverty is analyzed from the perspective of economic spillover effects.Second,the analysis of the rural poverty reduction effect of urbanization.Using China Household Income Surveys(CHIP)micro-household data and prefecture-level city urbanization rate data,empirically test the rural poverty reduction effect of urbanization from the perspective of income and consumption.The research results show that urbanization has significantly reduced rural poverty,and the impact does not weaken as the difficulty of poverty alleviation increases.Compared with central city,secondary town has a stronger rural poverty reduction effect.In order to deal with the endogeneity problem,we adopt methods such as IV and core variables replacement to identify,which shows that the above conclusion is stable and reliable.In addition,the results of mechanism analysis show that urbanization can reduce rural poverty in a variety of ways,including changing the employment structure of rural households,increasing non-agricultural wages,increasing urban residents' food expenditure,increasing rural land prices,and increasing the effective working hours of rural households,but the location effect of urbanization does not exist.Third,the analysis of the effect of urbanization on rural income inequality.Using the unconditional quantile regression method developed in recent years,the difference of the income growth effect of urbanization on rural residents at different income quantiles is studied.The research results show that the income growth effect of urbanization is not evenly distributed to rural residents,and rural residents with higher income quintiles benefit more from the process of urbanization.Urbanization has generally increased the income level of rural residents and reduced rural poverty while widening the income gap within rural areas.Based on the "poverty-growth-inequality" triangle framework and the idea of"counterfactual" income distribution,this paper analyzes the loss of the rural poverty reduction effect of urbanization due to the widening income gap.The inference is that if the income growth effect of urbanization is balanced,it will not only help reduce rural income inequality,but the rural poverty reduction effect of urbanization will be more significant.Fourth,the analysis of the effect of urbanization on the intergenerational income mobility.The micro-survey data is used to construct intergenerational mobility indicators for each city,and then the relationship between intergenerational mobility and the level of urbanization is examined at prefecture-level.The research results show that the development of urbanization has improved the intergenerational mobility in rural areas,and this conclusion has been proven reliable through multiple robustness tests.As far as this chapter focuses on the intergenerational mobility of children whose parents' income is in the 25th percentile,it is found that urbanization has increased the possibility of upward mobility while reducing the probability of falling into poverty.Further mechanism analysis results show that increasing education expenditures,alleviating rural poverty,and providing more non-agricultural employment opportunities are important channels for urbanization development to improve rural intergenerational mobility.Since China's urbanization level lags behind the industrialization and overall economic development level,we should speed up the pace of urbanization development in the future.While releasing the agglomeration effect of urbanization,reduce rural poverty and increase farmers' income through urbanization'spillover effect.The formulation of poverty reduction strategy in the new period should fully consider the poverty reduction effect of urbanization and smooth its influence transmission path.From the perspective of urbanization mode selection,full attention should be paid to the development of secondary towns.The formulation of poverty reduction strategy in the new period should fully consider the poverty reduction effect of urbanization,and smooth its influence transmission path.Second,give sufficient attention to the widening of the income gap in the process of urbanization.Improving the income distribution of rural residents and narrowing the income gap should be the basic starting point for poverty reduction policies in the new era.Third,we should better grasp the current favorable development stage and create a fair environment for social members.In the future,we should further increase education expenditure,pay special attention to vulnerable children in poorer areas,and pay more attention to the balanced allocation of educational resources.China' urbanization process is closely related to job creation,which is the advantage of China's urbanization.In the future,we should continue to grasp this advantage and strive to create jobs and expand employment.In comparison with existing literature,this article may have marginal innovations in the following aspects:(1)Building a theoretical model based on the "semi-industrial,semi-agricultural"livelihood model under the background of urbanization in China and the microscopic perspective of rural households to analyze the impact mechanism of urbanization on the income level and poverty of rural households.It not only provides theoretical support for the rural poverty reduction effect of urbanization,but also provides policy inspiration for how to better exert the rural poverty reduction effect of urbanization.(2)Research the effects of urbanization on poverty reduction within the prefecture-city level.Domestic literature mostly studies the impact of urbanization on rural poverty from the provincial level,but does not go to the prefecture-city level.Ignoring the difference of urbanization level in different cities in the same province may lead to biased estimation results.(3)The existing literature does not pay enough attention to the study of urbanization on rural income inequality,and the research on the effect of urbanization on rural poverty alleviation ignores the perspective of income distribution.While this paper uses the unconditional quantile regression method developed in recent years to analyze the impact of urbanization on rural income inequality and further analyzes the loss of the rural poverty reduction effect of urbanization due to the widening income gap.(4)The existing literature does not directly focus on the relationship between urbanization and intergenerational income mobility in rural areas.This study supplements the existing literature.In addition,this paper discusses the rural poverty reduction effect of urbanization from the perspective of intergenerational mobility,which is a further supplement to the perspective of income growth and income distribution.