The Impact Of Urbanization And Economic Growth On Urban - Rural Income Gap In Industrialization

According to the Dual Sector model, there exists a relationship among theurbanization, economic growth and the urban-rural income gap during the process ofindustrialization.This paper firstly reviews the existing research literature on the interactivemechanism among the urbanization, the economic growth and the urban-rural gap,and does a statistical description of the evolution track, then create a theoretical model.At last, the data of1978-2011was selected, and an empirical study was conducted byusing econometric method. The study found are as follows:(1) with the increase ofthe economy, the urban-rural income gap is expanding and increasingly influencedover the time path. Given a stable economic growth, if the urban-rural income gapremains unchanged, the urbanization grows rapidly at first and then at the decreasingspeed over time.(2)There is a negative relationship between the urbanization and theurban-rural income gap, the higher the urbanization, the smaller the urban-ruralincome gap. Besides, there is a positive relationship between the economic growthand the urban-rural income gap, the faster the economic growth, the greater theurban-rural income gap. Under the circumstance of the rapid economic growth, if theurban-rural income gap remains unchanged, the urbanization should developsynchronously.(3)Along with the economic growth, the ability of the rural economyis becoming weaker, so that the rural economy can not generate enough income forthe farmers to live a life matching with the economic growth fruit.(4)In the long run,only conforming to the universal law of industrialization and urbanization,promotingagriculture industrialization, industrialization and urbanization simultaneously,realizing the town-city population transformation and reducing the number of farmers,can we really address the "three rural" issues, eliminate the dual structure, thusachieving inclusive growth, and share the fruits of the economic growth between theurban and rural residents.Based on the relationship and the empirical study, we draw some conclusionsthat under the background of the rapid growth of the modern sector economic, along with the economic development, the rural economy is capable of carrying less andless population. Practices have proved that trying to absorb the surplus labor force isimpossible; the only way to narrow the urban-rural income gap is to reduce thenumber of farmer and accelerate the migration of the rural and urban population.