The Research On The Correlation Between China’s Urbanization And Urban-rural Income Gap

Recalling the development of all the counties, they are accompanied with theproblems brought by the urbanization and the income gap between urban-rural. Onthe one hand, with the rapidly development of China’s economic, the people’s percapita income grew steadily and the living standards of residents increased since thereform and opening up. However, the income gap remains a serious problem, whichcauses a certain impact to China’s economic development. On the other hand, withthe accelerated process of industrialization, China’s urbanization has gone throughthe recovery stage, steadily stage and speed-up stage. The process of urbanization isaccelerating, a large number of rural population migrate to urban. As a result, it willbring the growth of investment and consumption and provide the multi-level humanresources for urban areas. The average endowment and the income of the ruralresidents will increase. The paper’s main content is to study what kind of impact onthe income gap between urban and rural areas, and to provide somerecommendations to narrow the income gap.First, the paper reviews the previous studies, and longitudinally analyzes thestatus of our country’s urbanization and urban-rural income gap, the result showsthat the process of the urbanization just like the gentle “S” shape, while the incomegap appeared volatility trend, and there are serious differences between differentregions; Secondly, based on the economic theory, the paper analyzes the impact ofurbanization on the income gap between urban and rural in the theoretical part, andbuilds a dual economic structure model to analyze the relationship betweenurbanization and urban-rural income gap. Then the paper gives the proposition: therelationship between urbanization and urban-rural income gap is inverted "U".Thirdly, the paper collects the inter-provincial panel data from1984to2012, anduses the dynamic panel data mode to test whether it is a nonlinear relationship or not.It also selects other explanatory variables and the dependent variables to analyze inorder to ensure the robustness of the conclusions. Considering the regionaldifferences, the paper also divided the sample into three regions to analyze. Finally,the paper gives some suggests that how to narrow the income gap between urban andrural areas, which based on the research results.