Analysis Of The Influencing Factors And Trend Of The Income Gap Between Urban And Rural Residents

China’s reform and opening up has improved Chinese residents’ living standards, however, this policy has widened the income gap, especially the one of rural and urban residents at the same time. The reasons why this would happen are various, such as differences in education levels, economic development in areas, city progress and etc. In recent years, with the advancement of China’s urbanization process, nearly all aspects of Chinese cities gradually run over the villages and towns, a large number of peasants migrate to cities to find jobs, but based on a variety of reasons, such as rural migrant workers are lack of related technology experience, low level of education, the household register discrimination, the gap of urban and rural medical and health care and social welfare, the present situation of the widening income gap between urban and rural residents has not been effectively improved. The communist party of China’s 18th conference report suggests that we should increase the intensity of urban and rural development as a whole, enhance the vitality of rural development, gradually narrow the gap between urban and rural areas, and promote the final common prosperity. To reduce the income gap between urban and rural residents gradually is in line with China’s basic national conditions and with the aim of the communist party of China. China is still in the stage of urban and rural duality, and it is particularly important to solve the problem of Chinese income gap between urban and rural areas as for China to pass the transition and transformation of urban and rural duality smoothly and to fundamentally solve the problem of unbalanced development between urban and rural areas.This article study Chinese residents’ income gap between urban and rural areas with combining methods of qualitative analysis with quantitative analysis. In use of quantitative analysis, the author find that from 1991 to 1998, China’s urban and rural residents income gap is overvalued, but China’s urban and rural residents income disparity estimation deviation seems to maintain within 5% of the fluctuating range, almost no bias since 1999. Secondly, this paper intends to build a kuznets curve, and find that the trend of Chinese economy development is in line with the kuznets curve, China is now near the stagnation point, and will soon get into the decline phase of China’s urban and rural residents income gap. Again, by establishing a multivariate regression model, the writer get five significant variables which significantly influence China’s urban and rural residents’income gap, namely the average number of per one hundred thousand population of respectively junior high school student, the average number of students per one hundred thousand population of higher education school, urban and rural employment ratio, urbanization rate and the actual foreign investment pull rate. Model show that when the number of average per one hundred thousand population of junior high school students, the average number of students per one hundred thousand population of higher education school, urban and rural employment ratio, urbanization rate and the actual foreign investment pull rate increase 1 unit, China’s urban and rural residents income will increase 0.000295,0.001187,0.271979,0.050940,0.069632 unit. Among them, the elastic coefficient of urban and rural employment is the most sensitive to China’s urban and rural residents income gap. And the elastic coefficient of average per one hundred thousand population of junior high school students count is the smallest, whose impact on China’s urban and rural residents income gap is the most slow. Average per one hundred thousand population of junior high school students and higher education school students as well as the actual foreign investment pull rate increase will widen the income gap between urban and rural residents, however, the urban and rural employment ratio and the improvement of urbanization rate will be beneficial to reduce the income gap. Meanwhile, this paper make predictions of residents’ income gap between urban and rural areas in China for the next three years by using multiple linear regression models and the kuznets curve. Then the author find that if keep two decimal places of the result, this two kinds of method will roughly get the same number. Therefore, we have reason to believe that China’s urban and rural residents income gap will enter the decline phase, and the decreasing process will speed up gradually.Innovative part of this article mainly includes the following two aspects:firstly, most of the past researches on China’s urban and rural residents’ income gap select multiple variables from a single dimension, and the ones which select variables from multiple dimensions are rare. However, studying Chinese residents’ income gap between urban and rural areas from a single dimension will lead to the ignorance of the interaction between the dimensions’relevant variables. This article selects six dimensions, a total of 15 representative variables, to study Chinese residents’ income gap between urban and rural areas. Secondly, most of the researches on China’s urban and rural residents’ income gap choose gini coefficient as the representative variable of the income gap, but China’s gini coefficient data is not timely continuous, and the calculation caliber of China’s gini coefficient is different from the international one, which may lead to the error of the gini coefficient data and thus influence the results. Therefore, this article select the ratio of urban and rural income as the measure of China’s urban and rural residents’ income gap, which overcome both the unavailability and deviation of gini coefficient and thus make the result more objective and scientific.