The Influence Of Human Capital Composition On The Income Gap Between Urban And Rural Areas In Shanxi Province

Since the reform and opening up,China’s economic strength is getting stronger and stronger,the quality of life of residents is also getting higher and higher,but the income gap between urban and rural residents is widening year by year.Shanxi Province as an underdeveloped central province,urban and rural residents income gap problem is also very obvious.In 1978,the per capita disposable revenue of Shanxi’s urban and rural residents was 301 yuan and 102 yuan,respectively,and the urban-rural revenue gap was199 yuan.In 2018,the gap rose to 31,035 yuan and 11,750 yuan,respectively,and the gap became 19,285 yuan.Human capital is the most active factor in economic development and contains huge economic value.It is an economic variable that can be independently determined by the labor force.The labor force can improve its stock of human capital through investment in human capital,so as to increase future income.In general,the higher the stock of human capital,so the higher the quality of human capital owners,the corresponding income is also higher.Therefore,the urban-rural revenue gap can be narrowed by giving full play to the role of people’s capital.Many valuable results have been obtained from existing researches.However,human capital is composed of a variety of factors.In the process of human capital investment,which component factor is more conducive to narrowing the urban-rural revenue gap is rarely involved in the existing research.The answer to this question can provide valuable reference for the government departments to promote the formation of a more reasonable structure of human capital and further narrow the revenue gap of town and country under the limited resources.After reading many documents from domestic and foreign,this paper analyzes the previous research conclusions in this field.This paper expounds the evolution characteristics of the income gap between urban and rural residents in Shanxi Province by comparative analysis.This paper analyzes the present situation of human capital composition in Shanxi Province from the changing trend of education human capital,health human capital and migration human capital and their proportion in the total human capital.Based on the discuss of the current situation of urban-rural income gap and people’s capital in Shanxi Province,and the mechanism of human capital’s effect on the revenue of urban and village inhabitant,this paper selects the panel data of Shanxi Province from 2011 to 2018,and uses the fixed effect model to study the effect of human capital composition on the urban-rural income gap in Shanxi Province.Through a comprehensive analysis,this paper draws the following main conclusions: first of all,the urban-rural income gap in Shanxi Province is on the rise,and there are obvious differences with other provinces.Since the reform and opening up,the income of urban and rural residents in Shanxi Province has increased significantly.However,the income gap between urban and rural residents is also widening,increasing human capital can narrow the income gap between urban and rural areas,and the different composition of human capital has different effects on it.Specifically,for every 1% increase in the proportion of education human capital,the urban-rural income gap will be narrowed by0.17%;for every 1% increase in the proportion of health human capital,the urban-rural income gap will be narrowed by 0.14%;for every 1% increase in the proportion of migration human capital,the urban-rural income gap will be narrowed by 0.13%.Thirdly,the smaller the difference of human capital between urban and rural areas,the smaller the income gap between urban and rural residents in Shanxi Province,and vice versa.By comparing the impact of three kinds of human capital differences between urban and rural areas on the urban-rural income gap,it is found that the urban-rural differences of three kinds of human capital are positively correlated with the urban-rural income gap.Among them,the urban-rural difference of educational human capital has the greatest effect on the urban-rural income gap in Shanxi Province,followed by the health human capital,and the migration human capital has the least effect.Lastly,there are differences in the impact of macro tax burden and other variables on the urban-rural income gap in Shanxi Province.Generally speaking,the increase of the macro tax burden,fixed asset investment and the population growth rate will expand the income gap between urban and rural areas in Shanxi Province,while the increase of the economic openness can narrow the income gap.In view of the above conclusions,this paper puts forward the following policy recommendations: Firstly,improve the stock of human capital and optimize the composition of human capital.The government departments of Shanxi Province should pay more attention to the improvement of human capital stock,focuse on the improvement of education human capital,followed by health human capital,and finally the transfer of human capital.Secondly,narrow the gap between urban and rural human capital and attach importance to rural human capital investment.For example,rural libraries should be built to provide sufficient learning space for rural residents.Improve the salary level of grass-roots teachers and enhance their motivation to work continuously;perfect the social medical system and strengthen the investment of rural health human capital;establish the rural online employment information platform,put the urban enterprises and rural labor forces closely linked together.Thirdly,improve the policy system to help narrow the urban-rural income gap.Considering the different affordability of urban and rural residents,give certain tax incentives to rural residents;Increase the input of fixed assets in rural areas;While encouraging childbearing,more attention should be paid to the living burden of residents caused by childbearing.Optimize the mode of trade development and constantly strengthen the improvement of infrastructure.Lastly,increase credit support and strengthen risk control.The lower income level of rural residents restricts their investment in human capital,so the government should encourage financial institutions to increase the credit support for rural human capital investment.In addition,due to the limited ability of rural residents to bear risks,it is necessary to strengthen risk management while doing a good job in credit support.