The Research On Urbanization And Opening How To Effect The Income Gap Between Urban And Rural Areas

Since the Reform and Opening up,China's economic strength has greatly increased,people's living standards continued to improve.But,with the rapid development of economy,income gap between urban and rural areas continued to widen.It has not only seriously affected the construction of harmonious society in China and "China Dream" can be realized,but also hindered the sustainable and healthy development of economy.So,it has attracted the attention of a growing number of scholars.In the factors affecting the income gap,the level of urbanization and opening are two very important.As we all know,with the level of urbanization and opening has greatly increased,China's income gap between urban and rural areas has continued to widen.Our study focused on the impact of the mechanism between the three.Firstly,by reading the related literature,we found scholars have a big difference on how the urbanization impact the income gap.We found that different scholars based on different data and methods reached a different conclusion.It is also apply to the opening study.Secondly,we through theoretical analysis,studying the mechanism between the three.We found that urbanization can influence the income gap between urban and rural areas by the employment effect,effect of human capital accumulation and upgrade effect of agricultural structures.Opening can influence the income gap between urban and rural areas by effect of employment,income distribution effect of trade,technology spillover effect and upgrading industrial structure effect.At the same time,both cross effects can affect income gap between urban and rural areas.Finally,we use GMM model to study the mechanism between the three based on the China's 30 provinces and cities provincial panel data from 1996 to 2013.The results showed that the level of urbanization in the acceleration phase(30%?60%)of the increase will significantly narrow the income gap between urban and rural areas.Also the opening will narrow the income gap between urban and rural areas.In the meantime cross effects between the two will narrow the urban-rural income gap.On the basis of the above research,this paper gives some suggests that how to narrow the income gap between urban and rural areas,which based on the research results.Those suggests including urban-rural intergration,changing the tendency of the city,regional economic development and agricultural modernization.