Urbanization And Urban-Rural Income Disparity

International economical experience shows that urbanization and urban-rural income disparity always comes with economical growth, for that reason it becomes a preferential topic many scholars have studied, but yet there is not a consensus conclusion that the influence of urbanization on urban-rural income gap is positive or negative. Besides, every province takes out different development in urbanization as well as income gap, therefore the research in the country cannot simply applied to single province. Statistic shows that those cities whose urbanization are higher than national level but urban-rural income gap are lower, most of them are from developed private economic province. Due to the above reason, this paper chooses Zhejiang the most dynastic economic province as object, and studies its urbanization and urban-rural income gap, then hoping through econometrical study can prove the influence of urbanization as well as private economy on urban-rural income gap, at last based on the results some suggestions will be given. The paper is made up of5part, and Chapter1is an introduction that describes the background of the subject, then overviews the abroad and domestic research of the related subjects, from four aspects containing the cause、measurement and decomposition、influencing factors of urban-rural income disparity and the relevance of urban-rural income disparity and economic growth. In the Chapter2, it first definite urbanization and the measurement, then divides the process into three stages. Rural industrialization had promoted the first stage, followed by the accelerating of middle and small cities; the last driven force is the development of large cities. Zhejiang urbanization also featured private economic driving; private capital promotes urbanization through investing non-agricultural industry and cities’infrastructure construction. The paper exams the measurements of income disparity, and decides to use the Theil Index to represent Zhejiang urban-rural income disparity. In the three stages of the income gap, only the first stage is narrowing.Chapter3and Chapter4are the main parts of the dissertation. For better studying the influence factors on the income gap, the paper use the Sharply-value decomposition to decompose Zhejiang urban-rural income disparity with8variables, named urbanization、private economy、 human capital accumulation、financial expenses on wealth、agricultural supporting、finance development、imports and exports、economic structure. The result shows urbanization is the NO.1factor, and the influence of private economy is bigger year by year, except economic structure, other5factors are of importance to urban-rural income gap. After getting the contribution and importance of each variable to the income gap, the paper furthermore utilize panel data model of11cities in Zhejiang to analysis the above variables’influence on urban-rural income disparity. But wage rigidity would impact income, so as to income gap, so dynamic panel data model should be considerate. After introducing lagged urban-rural disparity gap into the model, we can get urbanization and private economy have negative impact on urban-rural income disparity, other factors except financial expenses on wealth will narrow urban-rural income gap, and the early gap will have positive impact on current urban-rural income gap. In the last chapter conclusions and suggestions are made.