An Empirical Analysis Of Income Gap Between Urban And Rural Residents In Shandong Province

The level of economy in our country has developed rapidly, and people’s living standards have been greatly improved since the Chinese Economic Reform. But the development between urban and rural is very unequal. The city’s economy makes great progress while the rural economy increases slowly. So the gap between urban and rural areas becomes gradually bigger. The problem of the large income gap between urban and rural is more serious especially since the 20 th century. It not only hinders the development of social economy, but also affects political stability. Income gap is a necessary phenomenon during the development of developing countries. Shandong province is at a higher level of our country’s economic development. The government of Shandong province began to attach importance to the development of rural and agriculture. So urban and rural residents of the income gap has narrowed, and the uncoordinated questions of urban and rural development have improved in recent years, but the income gap is still large. We can’t only pursuit of current economic development unilaterally, but also consider the balance and stability of the society and promote the common development between urban and rural areas. It is very important to explore the changing trend of urban and rural residents income gap, find out the causes of widening income gap between urban and rural residents, and take measures to narrow the gap.The first part is the introduction of this article. It simply introduces the research background and significance, literature review at home and abroad. The second part is the relevant theoretical basis related concept of the urban and rural income and statistical ideas of this paper are explained briefly. The third part is the basic situation that has carried on the detailed research and analysis of the income between urban and rural residents in Shandong province. This paper studies the trend of the residents’ income gap between urban and rural areas in Shandong province by using descriptive statistical analysis method firstly. It can be divided into four stages. The income gap between urban and rural residents have experienced first to expand again after narrowing to narrow further to expand the overall trend. Secondly the gap between urban and rural residents income level in Shandong province is compared with the national average for all urban and rural residents income level. The change trend of both is the same through the results, and the former is lower than the latter all the time. The last, this paper makes system clustering of 17 cities on the space according to the income level of urban and rural residents, and it divided the 17 cities into four categories. The fourth part is the empirical analysis of the income gap between urban and rural areas in Shandong province. Firstly, this article makes linear relationship of income ratio between urban and rural areas and four different sources from the aspects of income structure. Secondly, it explores the influence of urban and rural residents income gap in the several aspects, such as the economic development, urban and rural dual structure, fiscal transfers, and the education. In terms of economic development, it fits a quadratic function model between urban and rural income ratio and per capita GDP, so the result verifies the inverted U hypothesis. It uses the principal component regression method in urban and rural dual structure and the method of stepwise regression in other aspects. It discusses on the influence of the income ratio between urban and rural areas in Shandong province in agricultural and non-agricultural labor productivity, dual contrast coefficient, the degree of urbanization, rural proportion of investment in fixed assets, the government support proportion and education. The fifth part is put forward corresponding policy recommendations of narrowing the income gap of urban and rural residents according to these conclusions. It is very vital that the government is supposed to establish a unified urban and rural household registration system, increase investment in rural, develop the rural non-agricultural industries vigorously, balance the social security system between urban and rural and develop rural education career.