An Empirical Analysis On The Income Gap Between Urban And Rural Areas And Its Impact On Economic Growth In China

In recent years,China's economic growth has made great achievements,and China's urban-rural income gap is also narrowing steadily.Moderate income gap can make low-income groups want to increase their income,effectively stimulate workers' enthusiasm and promote economic growth.However,it will lead to polarization and produce negative social and economic effects if the income gap is too large,then the level of consumption will be low,social stability and development will be affected.Because the economic contact is become closer between different regions,there is a spatial correlation between the economic growth and the level of urban-rural income gap among different regions.In this context,based on the premise of spatial correlation,this paper studies the impact of urban-rural income gap on economic growth and the influencing factors of urban-rural income gap in China.This article carries on the definition of economic growth and urban-rural income gap,use the Theil index to measure the level of urban-rural income gap of 31 provinces and cities in China from 1998 to 2017 based on the research of domestic and foreign scholars,and from the perspective of spatial distribution,to explore provincial differences of urban-rural income gap.Then,we select the appropriate variables,respectively set up the spatial econometric model of influencing factors of urban-rural income gap.Further,we set up the panel regression model to analyse the impact of urban-rural income gap on economic growth.Through empirical analysis,we try to find out the regional differences in influencing factors of urban-rural income gap and whether the urban-rural income gap has a non-linear relationship with economic growth.Through analysis,the main points of this paper are as follows:First,China's urban-rural income gap shows a significant positive spatial correlation.The urban-rural income gap in different provinces has a high spatial dependence effect on geographical location.The size of the urban-rural income gap in a province is not only related to its own income gap level,but also significantly affected by the adjacent provinces.At the same time,the income gap between urban and rural areas in China has obvious aggregation effect,including “high-high” aggregation pattern and “low-low” aggregation pattern.Among them,"high-high" aggregation is mainly distributed in underdeveloped areas such as southwest and northwest area of China,while "low-low" aggregation is mainly distributed in relatively developed coastal areas such as east,north and south of China.Second,there are regional differences in the degree of influence factors of urban-rural income gap in China.On the whole,the level of opening-up,urbanization,human capital and industrialization have negative influences on the income gap between urban and rural areas,and has positive influences on the level of government support for agriculture.However,due to the differences in geographical location and economic development level,The level of opening up in the middle reaches of the Yellow River and the Yangtze river,and the level of financial development in northeast of China are conducive to widening the income gap between urban and rural areas.In addition to the fact that the level of human capital is conducive to the narrowing of the urban-rural income gap in the northern coastal areas,the impact is not significant in other areas.The improvement of urbanization and industrialization helps to narrow the income gap between urban and rural areas,but plays an insignificant role in coastal areas.Third,the urban-rural income gap in China has an inverted U-shape relationship with economic growth.On the one hand,the income gap between urban and rural areas promotes capital accumulation,gives China's export products competitive advantages and promotes China's economic growth.On the other hand,the urban-rural income gap restrains the development of rural consumption market,as a result,the consumption rate of Chinese residents is low and the human capital investment of rural residents is insufficient,and that's holding back economic growth.