Research On Income Gap Between Urban And Rural Residents Based On The Inlfuence Of Human Capital:1980-2009

In the past30years, the living standards of urban and rural areas have beenimproved considerably, totally changing the previous status of a slow growth or evenstagnation. By2009, urban disposable income per capita has reached17174.7Yuan. Meanwhile, annual net income per capita for rural residents has achieved5153Yuan.Compared with year1980, the former grew36.0times and the latter26.9times, whichindicates that, to some extent, residents in urban and rural areas share the success ofthe sustained rapid growth of China economy. However, during the economictransition, income gap between urban and rural residents is enlarging fluctuant,beyond3.3since2006. Although the government implemented some policies tonarrow the gap between rich and poor, the gap is expanding gradually.From another point of view, the difference in human capital of residents in urbanand rural areas is remarkable. Favorable policy for the urban part leads to theunfairness of social welfare distribution, such as education, medical treatment, socialsecurity and so on, which brings about degradation in quality and reduction inquantity concerning rural human capital investment, insufficient investment and lowstocking in rural human capital, which cause sluggish growth of rural economy, theincome gap between urban and rural residents expanding ceaselessly.The author probes the problem of income gap between urban and rural residents,from the view of human capital, using normative as well as positive analysis, whichshows human capital how to affect income gap between urban and rural residents.Firstly, analyze historical changes about income gap between urban and ruralresidents to gain the whole understanding of changes of the gap. Secondly, elaboratethe essential reason for the gap between rich and poor from the view of ways of formsand the investment subject of human capital. Thirdly, investigate the three effects of difference on human capital influencing income gap between urban and rural residentsby means of normative analysis, namely, threshold effect of the stock on humancapital of rural and urban residents, accumulative effect of the flow on human capitalof rural and urban residents and strengthening effect of one direction flow of humancapital. Next, by controlling differences on investment in fixed assets and householdregistration use error correction model to inspect and verify the inferences. Ultimately,give some proposals on how to reduce the gap between urban and rural residents, suchas increasing investments on rural human capital, lifting the level of rural humancapital, optimizing rural soft environment to attract human capital, improving therelevant supporting facilities and so forth.On the one side, the author also differentiates and verifies the threshold effect,accumulative effect and strengthening effect. On the other side, he neglects somefactors affecting the income gap between rural and urban residents and ignores somevariables, say, long-lasting overflow about rural human capital, because of data hardto collect, which might slightly influence the final conclusion's reliability.