The Association Analysis Of Rural-urban Migrants' Remittances On Income Gap Between Urban-rural Areas

Since the reform and opening up,migrant workers have played a vital role in promoting China's economic development,industrialization and urbanization.The specific performance is that the rural surplus labor transfers to major cities,especially the southeast coastal cities,and distributes in every corner of the city,which provides enormous momentum for the development and construction of the city.Due to the restriction of household registration system and the cost of living,it is usually difficult for migrant workers to transfer to the city with their family.In general,both husband and wife or male labor migrate to city.While the elderly and children stay at home,and they mainly rely on remittances from migrant workers to solve their living and school problems.This typical altruistic behavior will inevitably have a huge impact on the economic development of urban and rural areas,and then affect the income gap between urban and rural areas.However,current academic research on the causes of urban-rural income gap mainly focuses on political bias,economic structure,fiscal decentralization,financial development and other reasons.Existing studies rarely consider the impact of migrant workers' remittances on the income gap between urban and rural areas.In this paper,we establish a three-sector general equilibrium model and adopt a comparative static approach to investigate the short-term and long-term impacts of increasing remittances on income gap between urban-rural areas.Then we carry out numerical simulation according to the data of the National Bureau of statistics and the computable general equilibrium model to verify the conclusion of theoretical analysis.We mainly reach the following conclusions:in the short-term,the increase of migrant remittances can narrow the income gap between formal sector and rural sector,and widen the income gap between informal sector and rural sector;while we get the opposite conclusion in the long term.The numerical simulation results verify the validity of the theoretical model.In conclusion,the research on the relationship between migrant workers' remittances and urban-rural income gap shows that the impact of migrant workers' remittances on urban-rural income gap is complex.The short-term and long-term results are opposite.Policy-making departments must pay enough attention to guide migrant workers' remittances to have a positive impact on urban-rural income gap,so as to promote the development in urban-rural areas.