By Wu Hong & Zhang Xiaohuan, Research Team on “China’s Rural Governance and Innovative Development in the New Era”, Institute of Public Administration and Human Resources, DRC

Research Report, No.143, 2019 (Total 5643) 2019-8-21

Abstract: In order to advance urbanization in a new format and establish a sound mechanism and policy system for integrated urban-rural development, this study makes econometric model analysis and empirical tests on the relations between China’s urban economic development and the income gap between citizens within cities and the correlative impact mechanism. The research findings are as follows. First, the correlation between urban economic growth and income gap within cities is presented as an “inverted-U shape” in diagrams, only that the current stage is located on the left side of the turning point, not yet entering the equilibrium or optimized level. Second, the personal abilities and educational backgrounds of citizens constitute an important factor for the increasingly widening income gap in cities, a gap to be magnified along with the improvement of urban economy. To cope with it, the following policy options are made. First, a unified labor market needs to be put in place as soon as possible. Second, equal access to public services among different regions needs to be established and accelerated. Third, the workforce caliber needs to be enhanced through all-around vocation education and training.

Key words: new mode urbanization , income gap, policy options