Financial Deepening,Income Structure AndUrban-rural Income Gap

With great achievement in economy,people's income has been improved steadily in China.However,It is still an urgent problem to narrow the income gap between urban and rural.As a typical minority-inhabinited areas in western,the urban-rural income gap in Ningxia Hui Autonomous Region is outstanding.So how to narrow the local urban-rural income gap is always a hot topic,which also the government has concerned about.In order to explore the relationship between the financial deepening,income structure and the urban-rural income gap,we established a multiple regression model and a Panel Data Vector Auto-regression(PVAR)Model with the panel data of 5 counties and 18 cities in Ningxia from 2006 to 2015 for analysis.The main conclusions of this paper are as follows:(1)The relationship between financial deepening and urban-rural income gap is a dynamic two-way relationship.That is to say,Financial correlation ratio and financial development efficiency have a significant influence on the size of the urban-rural income gap.On the contrary,urban-rural income gap will also affect the degree of financial deepening.(2)There is a dynamic two-way relationship between the income structure of rural residents and the income gap between urban and rural areas.Among them,the operation income of rural residents has the greatest impact on the income gap between urban and rural areas.Simultaneously,the urban-rural income gap has the greatest impact on the transfer income and property income of rural residents.(3)The contribution to the urban-rural income gap from the large to the small as follows: rural residents' household operating income,financial correlation ratio,financial development efficiency,rural residents' wage income,transfer income and property income.(4)The contribution of urban-rural income gap to the rural residents' income structure and financial deepening from small to large is the transfer income,property income,family operating income,financial development scale,financial development efficiency and wage income.This paper suggests that the urban-rural income gap should be narrowed from the aspects of rural residents' income structure and financial deepening.For one thing,developing the agricultural economy vigorously and strengthening agriculture technical guidance are necessary.At the same time,government should broaden the effective channels for farmers to increase income,especially the channels of increasing the operation income and property income.For another thing,the investment and financial channels play an important role to decrease the urban-rural gap.Of course,Government had better add the transfer income of rural residents.For example,redistribution policy can reduce the inequality between urban and rural areas.On the other hand,it is important to expand the microfinancial scale and the scope of financial services in rural areas.Meanwhile,creating a friendly environment for the development of micro-financial institutions is necessary.At last,combining the governmental policy with the financial policy to reduce the threshold of agricultural loans and improve the financial development effectiveness in rural regions.