Study On The Income Gap Between Rural And Urban Of Shanghai City From Kuznets Inverted U Curve

This article studies the income gap between urban and rural of Shanghai city (IGBURS), and finds that the absolute income gap between urban and rural of Shanghai city (AIGBURS) has been higher than the national average since the beginning of 1994, but the relative income gap between urban and rural (RIGBURS) has always been significantly below the national level from 1989 to 2009. On this basis we use the RIGBURS to measure the IGBURS and combine with the theory of Kuznets inverted U hypothesis we research out that the RIGBURS had been on the peak of the inverted U curve and then the RIGBURS will be narrower and narrower with the increasing of the total economy. So we have the final conclusion that the IGBURS is almost good.The IGBURS in the findings of economic theory is almost good, but this doesn't mean that the IGBURS has been resolved or the IGBURS is no longer a problem, and this doesn't mean that the government should take the issue laissez-faire attitude because the invisible hand of the market will automatically adjust them. Economic factors have showed numerous times that the normal operation of the economy requires government's intervention, especially in the case of market failure. The existence of the gap between urban and rural is the appearance of market failure which requires government's intervention. In fact, peoples'livelihood has increasingly become the focus of attention as China started building a moderately prosperous society. The IGBURS should be resolved better and better, rather than just give the hope to the narrowing trend which showed by inverted U curve.The article has researched out main factors of the IGBURS after comprehensive analysis and model checking about the factors which affects the IGBURS. They are personal GDP (PGDP), social security coverage and dual economic factors. In these ones, PGDP expands the RIGBURS at first and then narrows it, the expansion of social coverage increases the gap and the dual economic factors and the RIGBURS change to the reverse ways. In addition, the article also discussed the two not included in the model takes which are institutional factors, namely: the household registration system and the development of finance. There is also a more detailed analysis about the mechanism that they affect the RIGBURS of these two factors: The household registration system accounts resulting inequalities between urban and rural in social security; The development of finance in the general case of imperfect market conditions constraints the blood of rural economic development (financial capital), and too much one pour into city will exacerbate the income gap between urban and rural.On this basis and the successful experience of develop countries, the article gives recommendations to resolve the IGBURS from improving the PGDP of Shanghai city, building better social security system and transforming the urban-rural economic structure three ways. To increase the PGDP of Shanghai the article thinks the development of economy should proposes the accelerating the development of tertiary industry of Shanghai and supplied the protecting and developing rural agriculture and the developing of rural finance; To improve social security system the article suggests we should concentrate to the household registration system, if not we should try our best to complete the Shanghai urban and rural social system improvement work; To change the dual economic structure the article suggests that the government should intensify the development of the second industry of Shanghai and enhance the production rates and help personnel transfer to the tertiary industry from the perspective of the dual economic factors.