The Analysis on Economic Development and Urban-Rural Income Gap of China

This paper discussed the resource of the urban-rural income gap from the aspect of the productivity difference, and we reach the conclusion that the urban-rural income gap mainly resource from the difference in the total factor productivity, the speed of labor transfer, and the capital stock. From the data analysis, we can see the increase of the total factor productivity will help narrow the urban-rural income gap, and the distortions in capital allocation had the negative effect on narrowing the urban-rural income gap, and the transfer of rural surplus labor to urban significantly increased farmer's income.