Urban-rural Income Gap Between The Human Capital Research

Since the adoption of reform and opening policies, the economic development in Shaanxi Province has achieved tremendous successes. The standards of living for urban and rural people improved with the steady increase of people's income. Especially, after China has started to carry out the strategy of large-scale development of the western region, the central government has increased its financial transfer payments to the western region, the major economic indicators of Shaanxi Province in recent years have been increasing faster and faster, and the per-capita income of rural and urban residents have reached unheard-of levels. But, there are still some problems we cannot afford to overlook, the growing gap between urban and rural income levels has been one of the these, and it has caused wide public concern by domestic and overseas scholars. The theories of human capital that human capital is one of the most important factors of our growth, and it positively related with resident income. The theories has been approved by most research, and it means that human capital could be one of the most important influence factor of the growing gap between urban and rural income levels. For proving this, this paper try to deals with how human capital investment impact the income of urban and rural residents and the income gap between urban and rural residents in Shaanxi Province.After study a lot of researches on human capital and the income gap between urban and rural areas, This paper selects lots of time series data about income distribution and human capital investment between urban and rural residents from 1978 to 2007 in Shaanxi Province to analyze the contribution of human capital investment to the growth of resident income, and Investigate if the human capital investment gap between urban and rural residents could impact the income gap between urban and rural residents in Shaanxi Province.Firstly, this article will introduce you the formation and development of the theory of human capital roundly to be basis of this paper.Secondly, by contrast with the national average, this paper will analyze the current situation about income distribution and the income gap between urban and rural residents in Shaanxi Province, and then, anticipate the trend of the income gap between urban and rural residents in the future 10 years in Shaanxi Province. Thirdly, this article will estimate the human capital investment gap between urban and rural residents from 1978 to 2007 in Shaanxi Province by computing the funds of human capital investment, then analyze the contribution of human capital investment to the growth of resident income and the relationship between the human capital investment gap between urban and rural residents and the income gap between urban and rural residents in Shaanxi Province by the method of regression analysis. The conclusion will be that, human capital investment has great impact on the income of urban and rural residents, but there has no relationship between the human capital investment gap between urban and rural residents and the income gap between urban and rural residents in Shaanxi Province.Lastly, according to the conclusion in the preceding part of this article, I point out that the key to reduce the income gap between urban and rural areas is making more human capital investment in rural regions, and then, I will offer a series of proposal to reduce the income gap between urban and rural areas in Shaanxi Province.