Study On The Impact Of Financial Development On Urban And Rural Income GAP In Urbanization Process

In recent years,income inequality has gradually become a prominent contradiction in China's economic development process.And it is an important factor that affects social equity,harmony and stability.In the overall income gap,the urban-rural income gap is the most important component.Urbanization and financial development are two important factors that affect the income gap between urban and rural areas.China has vigorously promoted urbanization,and the financial reform has been steadily advancing.But the income gap between urban and rural areas is still very large,which is inconsistent with the theoretical concept.So it is of great practical significance to clarify the influence and mechanism of financial development on the urban-rural income gap in the process of urbanization.In addition,it is also helpful to realize the coordinated development of China's urbanization construction and financial reform.This paper draws on the literature on financial development,urbanization and urbanrural income gap,and combs the relevant basic theories such as income distribution theory,dual economic theory,the effect of financial development on urban-rural income gap and the effect of urbanization on urban and rural income gap.Combined with the data,this paper analyzes the historical trend and current situation of China's financial development,urbanization and urban-rural income gap.Secondly,this paper analyzes the correlation between financial development and urban-rural income gap,and the correlation between urbanization and urban-rural income gap,and determines the empirical thinking of combining static and dynamic models.Based on the panel data from 30 provinces in China from 1993 to 2017,static model and dynamic model were established,which were analyzed from two aspects: financing efficiency and financing scale.Among them,static model adopts fixed effect panel model and dynamic model adopts panel threshold model.The static empirical results show that financing efficiency and financing scale can reduce the income gap between urban and rural areas;Population urbanization is conducive to reducing the urban-rural income gap,and economic urbanization will widen the income gap between urban and rural areas.Dynamic empirical results show that from the perspective of financing efficiency,when the population urbanization level is low,the financing efficiency will reduce the urban and rural income gap.When the urbanization level of population is high,financing efficiency can still reduce the urban-rural income gap,but the effect is reduced.From the point of view of financing scale,when the level of population urbanization is low,financing scale will reduce the income gap between urban and rural areas.At a high level of population urbanization,financing scale can still narrow the income gap between urban and rural areas,but the effect is reduced.According to the empirical conclusion,this paper holds that each province should deepen financial reform step by step according to its own economic development,continuously expand financial scale,and strive to improve financial efficiency.The government should steadily promote population urbanization and economic urbanization,and gradually liberalize the household registration system.In addition,the educational environment and the level of human capital in rural areas should be improved.The government should gradually increase government spending and stimulate economic vitality.