Research On The Impact Mechanism Of Urbanization On The Income Gap Between Urban And Rural Residents

The third Plenary Session of the 11^th Central Committee of the Communist Party of China made a great turning point of Reform and Opening-up policy 40 years ago.Since then,China has enjoyed a rapid social and economic development and scored great achievements that attracted attention around the world.However,the relative wealth gap between China's rural and urban areas remains big while the absolute wealth gap continues to widen.The Gini coefficient keeps itself above the international warning point of 0.4.The huge gap between urban and rural incomes has seriously affected the quality of income distribution in China.Along with reform and opening-up,China's urbanization also gained rapid momentum of development.Due to historical reasons,China established a more strict urban-rural dual structure back in the period of planned economy,so there was not much population mobility.This,however,was gradually changed after the Reform and Opening-up policy.A large number of urbanization construction projects were launched,leading to surplus rural labors moving to cities for work.Labors,products,lands,finance and other resources began to flow between urban and rural areas.The level of urbanization increased from 17.92%in 1978 to 58.52%in 2017.Scholars generally hold a positive attitude toward the impact of urbanization on the income gap between urban and rural residents,but there is no agreement on the direction or mechanism of the impact.China is at the historic joint point of fulfilling the“two centenary goals”.Dealing with the impact of urbanization level on urban-rural income gap has an important strategic significance for securing a decisive victory in finishing building a moderately prosperous society in all respects.This paper takes 30 provincial administrative units as samples to analyze how the level of urbanization impacts the income gap between urban and rural residents.Firstly,by referring to relevant literatures at home and abroad,this paper briefly discusses the theoretical basis of urbanization and income distribution and gives definitions.At the same time,it constructs a mathematical model and tries to conclude the relationship between urbanization and income gap between urban and rural residents,so as to provide a theoretical basis for further study of the impact mechanism of the two.Secondly,this paper views the evolution of urban and rural residents'income gap in eastern,central and western regions since the reform and opening up.Comparisons are made in vertical and horizontal dimensions,in order to figure out how these two factors impact each other.Thirdly,using the statistics of provincial-level administrative regions from 2005 to2017,the fixed-effect model is used to study the impact of urbanization on the income gap between urban and rural residents,while differentiated analysis is also carried out among regions with empirical tests.The conclusion is as follows:The level of urbanization is an important factor to affect the income gap between urban and rural residents.From the perspective of the entire historical cycle,it is generally a“U”type.In the new urbanization construction in China at present,the urbanization level has a positive impact on the income gap between rural and urban areas by narrowing the gap.This is achieved by promoting the development of secondary and tertiary industries and providing sufficient labors for towns,especially in eastern and western regions.Finally,based on previous research results,this paper proposes some policies to further narrow the income gap between urban and rural residents.First,continue to promote the new urbanization.Second,promote the development of urban and rural integration.Third,advance the construction of a new socialist countryside.Fourth,carry out a regionally differentiated development strategy.