An empirical study on effecting factor of income disparity between urban and rural residents in China

The imbalanced urban-rural development and enlarging urban-rural income gap have become the main bottleneck of social and economic sustainable development in China. Firstly, this paper analyzed the actual situation and historical evolvement trend of income disparity between urban and rural residents in China. We concluded that since the reform and opening up, the urban-rural income disparity in China shows the phase change characteristics of reduced- expanded- again reduced- again expanded- flattened. Then, according to the statistical data from 1978 to 2008, multiple linear regression models were built to test the relationship between urban-rural income disparity and its effecting factors. Empirical results indicate that the urban-rural dual economic structure, urbanization level, growth rate of per capita GDP and employment structure has a positive correlation with the urban-rural income disparity, but a negative correlation between the level of rural financial development and the urban-rural income disparity. Finally, some countermeasures and suggestions on how to narrow the income disparity between urban and rural residents are proposed.