An Empirical Study On The Relationship Between Financial Development And Urban-rural Income Disparity

With the deepening of reform and the gradual establishment of market economy, China has made remarkable achievements in economy. While improving people's lives at large, income gap between urban and rural residents is in a growing trend, which means income gap between urban and rural residents remains stable previous to the reform and opening up, after that the gap is in a process of narrows down at the first stage, and then expands. Currently, the huge income gap between urban and rural residents not only affects the national economic development, but also is one of those serious problems that restrict Xinjiang's economic development. This problem has become a concern of all sectors of the society. There are many factors affect income of urban and rural residents, information bulky, it indeed isn't easy to find new breakthrough in method or conclusion in research on income disparity, basing on the abundant research results of experts inside and outside. Finance is the heart of the modern market economy, its development can promote economic growth. It will affect the urban and rural economic development if it is disequilibrium, and will eventually lead to uneven in urban and rural income. Based on this logic, this paper focuses on two aspects of the impact financial uneven development in Xinjiang has on income gap between urban and rural areas based from the financial perspective. And we use single-equation model, simultaneous equation model to empirically study the relation of the financial factors and income in urban and rural areas. We discuss the impact variables have on urban and rural income, the main problems at this stage and the basic idea to solve the problem. In the end, policy proposals such as narrow income gap between urban and rural residents in Xinjiang as well as reduce the income gap between urban and rural in southern and northern Xinjiang are given based on the conclusion. The first part of this article explains the background of this subject, gives a brief description research methods of the article, and overview of the current research results of the financial development and urban-rural income gap in domestic and foreign, makes an objective evaluation; The second part is the theoretical basis of this paper, it outlines respectively the theory of financial development, theory of income distribution and theory of relationship between financial development and income inequality, and makes s hypothesis that financial development in Xinjiang effects of non-balanced urban-rural income gap; The third part evaluates the actuality of non-equilibrium financial development and urban-rural income gap in Xinjiang, and comparing the urban and rural income levels with the nation and the mainland developed provinces, for the purpose of have a comprehensive understanding of the actuality of urban-rural income gap in Xinjiang. In which, we analyze the actuality of non-equilibrium financial development from the aspects of urban and rural non-equilibrium and areas non-equilibrium in financial development, and we discuss the causes respectively, and find problems, laying the groundwork for the later policy recommendations; fourth part of the empirical analysis of urban and rural finance development in non-equilibrium of the urban-rural income Gap, and the empirical Analysis of the Xinjiang regional financial development on the urban-rural income gap between non-equilibrium effects, the results of empirical studies made on the level of financial development and financial development of efficient non-equilibrium non-equilibrium is the income gap between urban and rural residents the reasons for the conclusions of the Granger. And the results of empirical studies have made the northern and southern Xinjiang's financial development and between urban and rural incomes not showed the typical inverted "U" shaped relationship and financial development indicators in variable on the southern and northern agricultural loans income gap between urban and rural areas have played a significant impact on the conclusions. The fifth part of puts forward policy recommendations; sixth part of this paper shortage and the outlook is a summary of the full text and a number of deficiencies.