The Causes Of Widening Income Gap Between China's Urban And Rural

The economy of china has grown rapidly for over 30 years, but the rapid economic growth is accompanied by widening income gap between urban and rural.Inequality in income distribution has a great harmness to the development of social and economic, so we should analyze the reasons why the income gap between urban and rural of china has been widening, and take appropriate measures to reverse this trend.In the paper, The status of China's urban-rural income gap would be described combined with the process of economic development. Generlizing the causes of China's urban-rural income gap have been reseached, then constructing an economic growth model of three sectors, in which contained the movement of production factors. Analyzing the influence of population movement, migrition,industrialization,urbanization and the progress of techonolgy in three sectors on the widening income gap of China's urban-rural. The results show that under the current household register system, although population movement from rural to urban can both increase the income of urban and rural residents, but it does not narrow the income gap between urban and rural as commonly thought, on the contrary, it will expand the urban-rural income gap. But the migration from rural to urban and the urbanization have positive impact on the urban-rural income gap. Model also shows that the progress of technolgy in agricultural sector and the informal sector can narrow the income gap between urban and rural, but the progress in formal sector will expand the gap, and financial discrimination is another cause of widening gap between urban and rural.Then on the basis of theoretical analysis, the empirical test is preceeded, the results of empirical support the theoretical analysis. Compared to the rate of urbanization, the rapid industrialization has significantly impact on China's urban-rural income gap. And accelerating the Urbanization, increasing the government expenditure on rural will be conducive to narrowing urban-rural income gap, the empirical results also support the theorical conclusion that the mobility of population does not reduce the income gap between urban and rural, but increased it.