An Empirical Analysis Of Relationship Between Urban-rural Income Gap And Economic Growth Of Hunan Province

Since the reform and opening up, with China’s rapid economic growth, urban-rural income gap is expanding. Some scholars’ research found the relationship between the urban-rural income gap and economic growth in China has obvious regional, rather than national unity. Hunan as one of the most active provinces in economic development in central China, the relationship between urban-rural income gap and economic growth is typical and representative. Research the relationship between urban-rural income gap and economic growth of Hunan would help us understand its overall situation and the development trend of income gap in the urban and rural areas on which to base policy for urban and rural. In the same time, it also can provide some references for other provinces.This paper studies the relationship between the urban-rural income gap and economic growth of Hunan provinces since the reform and opening up, and compared the basic situation of Hunan province with the national average. We found that, with economic growth, the absolute urban-rural income gap in Hunan Province expand year by year, and the relative urban-rural income gap in Hunan Province in a fluctuation state, and can be roughly divided into five stage. The economic development of Hunan province is slightly below the national average, but the variation trend has been similar to national averages. The changing relationship between the urban-rural income gap and economic growth empirical evidence of 1978-2013 in Hunan Province shows that they satisfy the inverted U relationship and in line with the Kuznets inverted U hypothesis of adverted curve. In theory, the Inflection point of urban-rural income gap of Hunan Province was emerged in 2005-2006, and it is in the midst of gap phase at present. Cointegration test shows that there is a long-term cointegration relationship between the urban-rural income gap and economic growth of Hunan provinces. Grainger Granger causality test shows that the long term Hunan province income gap between urban and rural areas is a one-way Grainger reason to economic growth. Multiple regression models showed that the main reason to affect the income gap between urban and rural areas of Hunan province has the degree of Urbanization, human capital and the level of education. Considering the unbalanced of Hunan’s economic development and The complex basic situation, At last, we use the panel data of Hunan province in 2001 to 2012 researched relationship among the urban-rural income gap, the economic growth and the degree of Urbanization of different regional in Hunan provinces, and founded that the relationship between the urban-rural income gap, the economic growth and the degree of Urbanization of Hunan provinces has obviously different in different regional. Finally, this paper summarizes the research results and gives the relevant policy recommendations.