Research On The Relationship Between The Income Gap Between Urban And Rural Areas And Urban Unemployment

At present,China's economy is growing rapidly with the economic output ranking second in the whole world.With the gradual decline of the growth rate,Chinese people pay more and more attention to the quality of their own development quality.In the labor market,full employment and narrowing the income gap have become the focus of their attention.As a developing country,the stability of the national economy is the most important thing for China,and the urban employment rate and the income gap between urban and rural areas are the typical issues in the labor market at present stage.It seems that there is no direct relation between the urban unemployment and the income gap between urban and rural areas since they have different objects.But actually,in the process of economic development,the indirect transfer utility caused by the change of one side will influence the other side.Therefore,it is necessary for us to explore the relationship between the two parties to help the country use limited resources to maximize the utility by using corresponding emphasis in the progress of policy making.In the late Twentieth Century,DMP model came out.This model explains frictional labor market creatively and provides a realistic explanation for the unemployment situation in the developing countries,which has become a powerful tool in the present research of unemployment theory.Based on the Transaction Structure of Two Sector in Harris-Todaro Model,this paper correlates the rural income level to urban employment level through the transfer of rural labor force.Based on the study of Bean and Pissarides,this paper builds the model of the relationship of income gap between rural and urban areas and unemployment level from the perspective of microeconomics by dividing population occupations to expand the study field of DMP model;analyzes the drive relationship between income gap between rural and urban areas and urban unemployment by using the changes and comparison of the corresponding indexes in the model;and the internal analysis of the income gap between rural and urban areas is also made in this paper to provide suggestions for China's development trend and strategy.This paper is divided into five chapters:The first part is the introduction,which mainly introduces the research background,the significance of the topic,the basic framework and the main innovation points.The second part is literature review introducing the main research methods of unemployment theory.DMP model is introduced and the literature review related to the income gap between rural and urban areas and unemployment rate is also made in this chapter to provide basis for this paper from the aspect of research methods and research content.The third part is the deduction of the DMP model theory.This paper makes detailed theoretical analysis and formula deduction from the point of view of urban and rural income.The conduction of income gap to unemployment rate is studied through the balanced dynamic relationship and effect of different bias is also analyzed from the aspect of policy implementation.The forth part is the empirical analysis.The basic part re-estimates the unemployment rate of our country.The part estimates the real urban unemployment rate of our country by adjusting the coefficients and makes brief analysis and demonstration of the rationality of the estimation result.The further part is about the use and inspection of the previous empirical analysis.The data in the past 20 years is brought into the previous expand model to test in this part.The equilibrium result of this model is used to explore the related factors of China's urban unemployment rate and income gap between rural and urban areas and exam the changes under the specific policy trend.The fifth part includes conclusions and policy recommendations.This chapter firstly summarizes the conclusions of this paper according to the above analysis.Secondly,according to the conclusion,corresponding reasonable policy recommendations are put forward combined with empirical situation of our country.At last,this part introduces the limitations and shortcomings of this paper and provides suggestions for future researches.Through the study,this paper gets the conclusions:first,DMP model can be effectively extended to the field of income gap between rural and urban areas and explain the internal causes of income gap.Second,Positive correlation exists between income gap between rural and urban areas and unemployment rate,which is achieved through the transfer of rural labor force.Third.The labor characteristics of urban and rural areas have great differences,and the reasons of income gap between rural and urban areas are related labor characteristics and marginal labor productivity.Forth.Unemployment compensation adjustment and improvement of employee intelligence itself are bidirectional,so we should not only give priority to fair bargaining,but also ensure the equalization of unemployment benefits at the same time.The main contributions of this paper are:First,apply DMP model to the study of the relationship between the Urban-rural Income Gap and unemployment rate,describe the process of urban and rural frictional labor market equilibrium through the establishment of equilibrium model group at the micro level and form the balanced formula of income gap between rural and urban areas and unemployment rate.Second,estimate the real unemployment rate of our country by adjusting the coefficient based on this model.Third,apply this model to the specific situation of our country and provide scientific and reasonable interpretation to the relationship of the income gap between rural and urban areas and unemployment rate.Forth,provide guidance for Chinese policy making tendency by combining the index changes.There are also three inadequacies.First,in order to ensure the data can be compared,the estimated error of the unemployment rate will influence the final results;Second,the special assumption values leading to rural area in the model may exist deviations;some subjective index changes of the income gap between urban and rural areas and the unemployment rate are without consideration,and the conclusion will inevitably have the accuracy problems.