Research On The Impact Of Urban-Rural Income Gap On Urbanization In China

Since the reform and opening up,China's society and economy have developed rapidly,and the level of urbanization has been greatly improved.At the same time,a large number of transforming rural labor are employed in cities and towns,but it is difficult for them to integrate into these cities and towns.From the perspective of labor supply,some domestic scholars think that the human capital of transforming rural labor is generally low,therefore it is difficult for them to integrate into cities and towns.Besides,human capital investment is closely related to residents' income.From the perspective of labor demand,some scholars also believe that the demand of labor force generated by economic growth and upgrading of industrial structure is the driving force of transforming rural labor,and the income gap will have an impact on economic growth.Under the background of huge income gap between urban and rural areas in China,it is undoubtedly of great significance to study the impact of income gap between urban and rural areas on urbanization and its mechanism.However,the reality is that related research of domestic scholars is very scattered,and there hasn't a systematic analysis of the mechanism of these two in theory.Based on this,this paper combines the existing research results at home and abroad,attempts to do this research,and verify the significance of the transmission mechanism through empirical tests.In the introduction part,this paper makes a literature review about domestic and foreign research on the impact of urban-rural income gap on urbanization,and concludes that urban-rural income gap may affect the development of urbanization from the perspective of the demand of labor for urban sector and the supply of heterogeneous labor force in rural areas.In the part of theoretical analysis,the new urban-rural migration model of development economics is used as the starting point for this paper.The employment probability of urban sector reflects the demand of urban sector for labor force.Under the assumption of liberalizing the homogeneity of labor force,the wage level of rural labor force entering urban sector is regarded as the function of human capital of transforming rural labor itself.That is to say,the wage level of rural labor force entering urban sector reflects the supply of rural heterogeneous labor force.In terms of the demand for labor force in urban sector,this paper draws inspiration from the research on economic growth and unemployment rate of Okun's^Law,transforms the impact of employment rate in urban sector on urbanization into that of economic growth on urbanization,and further analyses the impact of urban-rural income gap on economic growth and growth mode.In terms of labor supply,this paper draws lesson from the theory of credit imperfection about the impact of income inequality on human capital investment,and analyses how the income gap between urban and rural areas affects the human capital investment of rural residents-supply of rural heterogeneous labor force.In the part of current situation analysis,this paper first makes an overall analysis of the development of urbanization in China.According to Northam's classification criteria,urbanization in China is in the mid-term stage.In terms of coordination between urbanization and industrialization,the paper uses Chenery's analysis method to conclude that the current situation-urbanization lagging behind industrialization in China—has been greatly improved,and that urbanization and industrialization are basically in a balanced development stage.Secondly,from the perspective of absolute value and relative value,the paper analyses the changes of urban-rural income gap in China since the reform and opening up,and the causes of urban-rural income gap in recent years from the perspective of urban-rural residents',income composition.Thirdly,on the basis of theoretical analysis part,the current situation is analyzed from the angle of labor demand of urban departments.On the one hand,the contribution of total factor productivity to economic growth is taken as an index to measure the mode of economic growth,which analyzes the mode of economic growth in China since 2002.It is considered that the economic growth during some years tends to be intensive while and tends to be extensive during other years.On the other hand,the paper analyses the absorption of labor force by economic growth and upgrading of industrial structure in China.It holds that there is still a demand for labor force in the development of secondary industry,but the demand for labor force in tertiary industry has become the main sector to absorb labor force,while the demand for labor quality in tertiary industry is relatively high.Finally,the paper studies the current situation from the perspective of rural heterogeneous labor supply,analyses the gap between urban and rural human capital stock measured by years of education and the human capital investment gap between urban-rural sector,private sector and government,which provides some support for the theoretical analysis.In the empirical part,based on the random effect model of provincial panel data from 2005 to 2017,this paper analyses the total effect of urban-rural income gap on urbanization.The conclusion supports that urban-rural income gap hinders the development of urbanization.Scholars at home and abroad have disputes over whether the income gap between urban and rural areas affects urbanization and how effective it is from the perspective of urban demand for labor force.Therefore,in order to clarify the significance and impact of the transmission mechanism,the paper based on the intermediary variable model and makes a research by choosing economic growth as the intermediary variable.The empirical results show that the influencing mechanism of urban-rural income gap's impact on urbanization from the perspective of urban demand for labor force is established,which passes the significance test of 10%level and accounts for 24.6%of the total impact effect.Since there is no suitable intermediary variable from the perspective of heterogeneous labor supply,the paper subtracts the effect of urban-rural income gap on labor demand from the total effect of urban-rural income gap on urbanization,and then acquires a residual value which is regarded as the effect of urban-rural income gap on urbanization through influencing the supply of rural heterogeneous labor.The influencing mechanism of urban-rural income gap through influencing the supply of rural heterogeneous labor force is established,and the effect of this influencing mechanism accounts for 75.6%of the total effect.On the basis of theoretical and empirical analysis,this paper concludes with a summary of the research,then provides some policy recommendations for the development of urbanization in China.It holds that we on the one hand need to further narrow the income gap between urban and rural areas.On the other hand,we must encourage and support the human capital investment of rural residents.