Research On The Determinants Of The Gap Between Urban And Rural Resident Of China

Since the reform and opening-up,economy of china has experienced a remarkable change in these two significant aspects---rapid economic growth and income gap,which is sustainable widened in recent years.The bright contrast,between the soar of cities' development and the marginal climbing of farrners' income,epitomizes the contradictions that the social structure with dual economy has caused in many parts of china. Since 1985, The focus on the reform of china's economic system has transformed from agriculture to industry.Then,according to the institutional innovation, the enterprise began to have greater autonomy.Therefore,the industry throughout our country has greater opportunity to develop with a fast step.On the one hand,because the vast majority of industry was concentrated in the city, the development of industry naturally led the improvement of urban economy and increasing income of their residents accordingly. On the other hand, the speed of agriculture growth is slow in the relative extent on account of the generally weakening function of the institutional change in agriculture. Because there is a gap in growth speed between the industry and the agriculture,the income growth of urban residents and their rural counterparts is different.Specifically,During the span of 1985 to 2009, the increasing rate of rural residents'income at annual average is 4.12% lower than that in the city.The income gap between urban and rural areas is then gradually expanded.After the reform and opening-up, more economic benefits has been flowing to high income family, especially in city areas.The capital market in city is quite developed, high earners invest their additional fortune to such areas as insurance, security, real estate and so on, and thus achieve the goals for both preserving and increasing the values.The accumulative effect of wealth puts this income gap to more serious situation.The "Matthew effect---making the poor poorer and vise versa---gradually appears.Urban-rural income ratio in 1985 was 1.86:1,and this figure of 1991 has reached 2.40:1,then the ratio climbed in subsequent years(2.79:1 and 3.33:1 in 2000 and 2009 seperately).The gap of income distribution amongst residents,especially between urban and rural areas,has already presented a trend of accelerating expansion.More seriously,the continuous deterioration of this situation has caused the immense shortage of effective demand in the whole society,and finally will be a major problem to confine and hinder the sustainable development of economy in our country. Further and even more importantly,widening income gap between urban and rural residents exacerbate the profit conflicts and the social contradictions, and this has become a primary issue in regard to the national harmony and stability.How to solve the income distribution problems in the course of development, and how to balance the relationship of efficiency and fairness, development and stability,and these issues has attracted the public attention in the social economy.The gap discussed above has caused the attention of the party central committee,the report of 17th people's congress puted forward "deepen reform of the income distribution system, increase urban and rural incomes" and "both first distribution and redistribution should balance the relationship between efficiency and fairness and pay more attention to redistribution than fairness".In 2009, the government's work report took the coordination of urban and rural development into consideration as one of the overall principles,furtherly clarified the attitude of the party and the government aiming to this problem and the determination to solve it.In this essay, according to the current theories of income distribution and methods to measure the income gap,I promote the research around the issue of income gap between city and country,focus on the analysis to relevant reasons.This paper is divided into five parts.The first part is the brief introduction, mainly explains the background and significance of this topic,the review of literature at home and abroad and used methods and thinking pattern of research.The second part describes the present conditions ad effect of the income gap between city and country.The third part summarized the influenced factors to the income distribution in urban and rural areas. This article divides these influenced factors into three categories--namely political factors,market failure and ineffective government--and analyzes the distribution mechanism respectively.The fourth part empirically analyses the factors influencing the income distribution in urban and rural areas in China.To be more precise,quantifies the practical effects of various factors.The fifth part is to conclude the overall results and suggest some appropriate policy recommendations from both the market and the government aspects.This essay adopts the research method combining empirical analysis and normative analysis,and emphasizes the statistical analysis in empirical method.The results of research are as follows:firstly,the reform of economic system in China,the structural effect caused by which spreads the gap between city and country,is the fundamental reason of imbalance development;Secondly,The difference of original income distribution is,basically, the major factor to impact the income gap between urban and rural areas in China,because the current economic system came to China from the planned economy,there are still defects in our country's market economy.At the first stage of income distribution,the phenomena combining the lack of fairness and insufficient efficiency are prevalent;Thirdly,the distribution of China's education resources is unequal, that is not only one of reasons but also one of results for the income gap;Finally,redistribution of income,in theory,is expected to reduce the gap of income distribution,China,however,witness the opposite situation.Most of previous studies about this topic just emphasize the adjustment function of redistribution,and these phenomena,like low efficiency and inequity of distribution caused by unsound market,are neglected. This essay carries out the quantitative analysis to the effect of original distribution and redistribution,and then suggest some appropriate policy recommendations from both the market and the government aspects.The glaring disadvantage of this paper is that,when the difficult of collecting data shortens the span of research period,the changes of economical structure and statistical method will influence the accuracy of the measure results.