Study On Total Factor Productivity Of Agriculture And Urban-rural Income Gap

Since 1978, China’s reform and opening up to open the road to China’s development presents a new model, rapid economic growth, income and consumption levels of the country’s inhabitants strides. However, at the same time, the income level of the residents of the great disparity between this disparity is even worse. Among them, the income gap between rural and urban poor the most obvious level, which also contributed to the national income gap continues to deteriorate. Narrowing the income gap between urban and rural dual economic structure dependent on a smooth transition, Lewis’ dual economic theory greater emphasis on the urban modern sector gradually move towards the industrial age, follow-up studies indicate that dual economy toward a unified economy in the process, the most powerful force that propelled traditional agricultural sector to grow their own.This article is in this context, focusing on exploring the mechanism of agricultural TFP and urban-rural income gap. Firstly on agricultural TFP and the income gap between urban and rural areas, the existing research results to sort out, to clarify the existing analytical context, and then focuses on the basic principles of the dual economic and total factor productivity, to form the basis of this article analyzes.On the basis of the above two sectors of the economy model, this paper depicts a number of methods and technological advances in agriculture laborers’ wages deduced contact technological advances in agriculture and the income gap between urban and rural areas. Theoretical model shows that in the short term, technological advances in agriculture can improve workers compensation, prompting rising labor costs, and developing countries need more capital accumulation, rising labor costs are just not conducive to the accumulation of capital. After the remuneration increase would force industry to reduce the human capital needs, which would impede the flow of labor from the traditional agricultural sector to the modern industrial sector,resulting in income gap between industry and the agricultural sector continues toexpand, the income gap between urban and rural areas of practice.In the empirical part, first, the paper by using deap2.1 software, using non-parametric DEA calculated the Chinese 20 th seven provinces, the rate of technological progress of agriculture in 2000 and 2011, the agricultural technology and agricultural TFP efficiency; secondly, This article econometric model was the role of agricultural TFP for the income gap by empirical rationality to verify the theoretical model, where the dependent variable is the income gap between urban and rural areas, agricultural total factor productivity of the independent variable, while the rate of urbanization, rural fixed assets investment, the degree of openness in government’s role in economic activity and the economy as a control variable regression equation was added.The empirical results show that, first of all, DEA decomposition results show that the main driver of agricultural TFP increasing rate of technological progress in agriculture, agricultural technology to promote agricultural efficiency significantly increased TFP role. Increase agricultural TFP income gap between urban and no positive effect, consistent with the theoretical predictions of the model. Second, the urbanization rate and the income gap has reversed the relationship between changes,namely urbanization rate increased to reduce the income gap between urban and rural areas; increasing rural fixed assets investment will improve to some extent, the income gap between urban and rural areas. Finally, local government investments and the income gap has not improved; economic openness continue to increase, the income gap between urban and rural counter to worsen.This paper proposes policy recommendations as follows: First, the rate of technological advances in agriculture and the efficiency of the joint development of agricultural technology, to jointly promote the growth of agricultural TFP, allowing agricultural TFP really play a role in agricultural production. Second, to further promote the integrated development of urban and rural development; change "Onlyeconomic growth" model of development, will narrow the income gap between urban and rural areas as an indicator to measure the performance of local governments.