The Role Of Health Human Capital On Urban-Rural Income In China

The income gap between urban and rural areas has been a serious obstacle to the development of China's economy and society. Difference between urban-rural human capital is one of the important reasons which cause income gap. Presently, most researches focus on the effect of education on urban-rural income in domestic academia, while less ones pay attention to health, another basilica form of human capital. Under this background, this paper attempts to analyze the role of health on urban-rural income.First, based on the China Health and Nutrition Survey (CHNS), this paper estimates a set of household income production functions and the major results are as follows. Individual health has a significant positive correlation with income, and the economic return of health is substantially higher for rural population than for the urban population. These results provide a useful revelation for our country to shorten the income gap between urban and rural areas, that is, enhancing farmers' income through investing health human capital of rural population. After analyzing the actual status of health human capital investment in China, however, this paper finds both farmers and governments are lack of investment to health in rural areas. Therefore, this paper tries to bring forward some suggestions to improve the status quo at last.