An Empirical Study On The Impact Of Urbanization On The Income Gap Between Urban And Rural Residents In China

Since the reform and opening up,the income level of urban and rural residents in China has improved significantly with the development of economy,and the process of urbanization has accelerated with the rapid development of economy.However,with the development of society,the income gap between urban and rural areas has also increased significantly.In the end,the impact of urbanization on the income gap between urban and rural residents has become a hot topic for scholars.Firstly,this paper combs the existing concepts and theories about urbanization and the income gap between urban and rural residents,then analyzes the current research situation and summarizes the previous research methods.In the end,this paper makes an empirical analysis from time series analysis and spatial econometric analysisIn the first part,according to the time series data of urbanization and income gap between urban and rural residents and other related variables in China from 1980 to 2018,time series analysis method is used to study.Through co integration test and error correction model,it is concluded that urbanization has a certain lag on the impact of urban-rural income gap.Granger causality test confirms that urbanization is the Granger cause of the income gap between urban and rural residents.Impulse response analysis shows that after the impact of urbanization rate,the impact of urbanization rate on urban-rural income gap is positive at the beginning,and there is a process of first rising and then falling.Finally,the conclusion is drawn: from the long-term perspective,the improvement of urbanization rate plays an important role in widening the income gap between urban and rural residents in China.For every 1% increase of urbanization rate,the income gap between urban and rural residents will expand by 0.487%.In the second part,based on the panel data of 31 regions in China from 2005 to 2018,the impact of urbanization on the income gap between urban and rural residents is studied by using spatial measurement method.Firstly,through Moran index I,it is determined that there is a significant spatial correlation between urbanization and the income gap between urban and rural residents,which meets the preconditions of spatial econometric analysis.Then,we further test the spatial correlation and build a suitable spatial measurement model.Finally,the maximum likelihood estimation method is used to get the estimation results.Finally,the conclusion is drawn that the improvement of urbanization rate,openness of foreign trade,per capita real GDP and regional correlation can narrow the income gap between urban and rural residents.And the influence of urbanization rate on the urban-rural income gap has a more significant spatial spillover effect.Every 1% increase in the level of urbanization development in the surrounding areas,the urban-rural income gap in the region will be reduced by 0.067%.According to the research results,three policy suggestions are put forward to narrow the income gap between urban and rural areas: first,scientifically plan the urbanization construction;second,vigorously develop the economy and expand the openness of trade;third,strengthen the coordinated development among regions.