2017 2 nd International Conference on Education, Management and Systems Engineering (EMSE 2017) ISBN: 978-1-60595-466-0 The Change of Urban-rural Income Gap in Hefei and Its Influence on Economic Development Yue ZHANG 1 and Yuan HE 2 1 School of Accounting, Nanjing University of Science and Technology, Nanjing, 210094, China 2 School of Library and Information, Nanjing University of Science and Technology, Nanjing, 210094, China Keywords: Urban - rural income gap, Economic development, Principal component analysis. Abstract. In order to study whether Hefei economic development will have an impact on urban-rural income gap. Through the comparative analysis, this paper studied the historical change process of urban-rural income gap. Then, using the method of cointegration analysis, this paper analyzed the relationship between economic development and urban-rural income gap in Hefei. Finally, it is found that the economic development of Hefei has narrowed the income gap between urban and rural areas in Hefei. Introduction Hefei's economic and social development, with the implementation of the strategy of the rise of the central region to further deepen the continuous improvement. Data show that in 2012 the city of Hefei than 118 thousand people. Although the proportion of the population in rural areas in Hefei has been declining year by year, but because of the large number of base, so not to solve the problem of urban and rural income is bound to affect the stability and development of society. According to the Hefei Municipal Bureau of statistics data show that: in 1995, the absolute value of the difference between urban and rural income in Hefei was 3356.59 yuan, but by 2013, this figure has reached $17730.69. Therefore, it is very important to study the evolution of urban-rural income gap in Hefei.. Income inequality is the inequality of economic development, which belongs to the category of development economics. Most of the early studies are mainly based on the statistics, the first is the development of the income gap and empirical analysis of Kuschnir Azee's pioneering contribution. Concept of Income Gap between Urban and Rural Residents Because of the definition of urban and rural areas and the reasons for statistical methods, China's current income statistics are often divided into urban residents' income and rural residents' income. The income of urban and rural residents has a number of different criteria: A type of income to define, can be divided into the total income and net income, the total income is the sum of income, including the various channels; net income is the residual income deduction of some part of the necessary expenses. Two, the nature of the income to be divided, in the usual sense can be divided into four parts, namely, wage income, operating income, property income and transfer income. The above four kinds of income total income. Net income is the rest of the income tax, social security expenditure and accounting allowance. The average income of rural residents is known as "net income of rural residents", the income of urban residents as "disposable income of urban residents". In this paper, the author selects the per capita disposable income of urban residents and the per capita net income of rural residents as the main data source for the study of urban-rural income gap. 184
Analysis on the Change of Income Gap between Urban and Rural Areas in Hefei Income Profile Analysis Figure 1. Changes in per capita disposable or net income of urban and rural residents in Hefei during 1995-2013. According to figure 1 shows, from 1995 to 2013, Hefei city urban and rural income ratio from 3.6 in 1995 down to 2.8 in 2013, the income slightly smaller, but the absolute gap between urban and rural income from 3357 yuan in 1995 increased to 17731 yuan in 2013, in 18 years, the annual increase of 799 yuan. It can be seen from the analysis that the income gap between urban and rural residents in Hefei is expanding, showing the first decline, then rise, and finally the characteristics of small-scale fluctuations. Based on the analysis of the historical situation, it can be found that the change of the income gap between urban and rural areas in Hefei is roughly the same as that of the national economic reform and development. Divided into four stages: 1) From 1995 to 1997, urban and rural income greatly short decline than dropped from 3.6 to 2.73 of the income gap between urban and rural, urban and rural incomes in recent years were down 0.44. During this period, the purchase price of agricultural and sideline products increased two times, increasing the net income of rural residents, with an average annual growth of up to 26%. At the same time, the per capita disposable income of urban residents increased by 20% year on year, lower than the income of rural residents by nearly 6 percentage points, resulting in a decline in the income gap between urban and rural areas for more than 4 years. 2) From 1998 to 2003, the income ratio of urban and rural residents rose from 2.95 (slightly lower in 2002) to 3.27, and the urban-rural income gap was widened by the extended period, with an average annual increase of only 0.05. For 1751 yuan, an average annual 291 yuan. 3) From 2004 to 2013, urban and rural incomes entered a period of fluctuation: first, from 2.98 in 2004 to 2.68 in 2010, then rebounded to 2.86 in 2011, and finally to 2.80 in 2013, the basic Maintained at around 2.88, at this stage, the urban and rural income ratio changes than the previous two stages of a significant decline, only 0.34. But the absolute value of the absolute value of urban and rural income from 6477 yuan increased to 17731 yuan, an increase of 11,254 yuan, an average annual increase of 1250 yuan. 4) However, in 2011, due to the substantial increase in wage income of urban residents, urban residents per capita disposable income growth rate of 18%, fast and rural residents 8 percentage points, so there has been a brief recovery; to 2013, Hefei city government Increased support for agriculture, increased wage income of rural residents. At the same time, the income of rural residents and urban 185
residents income growth almost simultaneously, an increase of 3 percentage points difference, making the urban and rural income gap in the overall dynamic stability. Income Structure Analysis We studied the source and structure of income of urban residents and rural residents in Hefei from 14 years to 2014, and the comparative analysis found that: 1) In general, the wage income of urban residents and rural residents in Hefei has been greatly increased. The wage income is basically reduced year by year, but the absolute number of the two is expanding year by year. The income of urban residents accounted for 76.09% of total income in 2000 dropped to 68.09% in 2013, the proportion of a significant decline; rural residents wage income from the total income from 47% in 2000 to 2013 54 %, The proportion of a smaller increase. Wage income remained unchanged from basic, from 2.23 volatility in 2000 to 2.80 in 2012. The absolute number of wage differentials in urban and rural areas is increasing year by year. The total income of urban residents' wage income is 2.7 times of that of rural residents in 2000-2013. 2) Hefei rural residents in the property and transfer income growth rate faster than the growth of urban residents, property income ratio and transfer income ratio is basically unchanged, the absolute number of the two is still increasing year by year. The proportion of urban residents increased from 22.95% in 2000 to 26.27% in 2013, and the number of rural residents increased from 7% in 2000 to 9% in 2013. Property income ratio and transfer income ratio decreased slightly, of which property income than the 10.18 in 2000 decreased by 0.9, transfer income ratio by the year 13.31 down 1.81. 3) Urban residents operating income growth faster than rural residents, operating income ratio decreased significantly, the absolute number of the two basically little change. The proportion of urban household income to total income has increased significantly, from 0.95% in 2000 to 13.39% in 2013, and the increase in household income has become a strong driving force for the increase of total income of urban residents. The income of rural households accounts for the total income A slight decrease from 46 per cent in 2000 to 37 per cent in 2013. There was a significant reduction in operating income ratio from 5.23 in 2000 to 3.22 in 2013. 4) The difference between wage income and operating income is expanding year by year. The difference from the 4801 yuan in 2000 rose to 15,361 yuan in 2013, expanding nearly 4 times. At the same time, the difference between wage income and property and transfer income is also expanding year by year. The proportion of wage income is also increasing year by year: the difference increases from 3395 yuan in 2000 to 11605 yuan in 2013, The proportion increased from 30% in 2000 to 43.77%. 5) The difference between operating income and property and transfer income is different in urban residents and rural residents. For urban residents, the difference between operating income and property and transfer income is gradually To increase, the ratio of the two changes from 1:24 in 2000 to 1: 1.9 in 2012, operating income in the proportion of property and transfer income increased rapidly; but for rural residents, the business The difference between income and property and transfer income is gradually increasing, the ratio of the two from 2000 to 6.3: 1 change to 2012 4.2: 1, operating income in the property and transfer income The proportion gradually decreased. Summary of the above analysis can be known: 1) From the perspective of income structure, the proportion of urban residents in Hefei is relatively large, the proportion of wage income is reduced, and the proportion of operating income is increasing. The income structure of rural residents is the same as that of urban residents. The proportion of wage income and operating income and the total income are basically the same, the average annual urban residents accounted for about 75%, the basic annual average of rural residents accounted for about 89%. 2) From the income gap, the gap between the income level of rural residents and urban residents is still obvious, the most significant gap is wage income. Due to the accelerated process of urbanization in Hefei, the wage income of rural residents increased significantly, and the income of rural residents' 186
household income gradually changed into property income, which resulted in the increase of property income of rural residents and the decrease of operating income. 3) From the percentage of economic growth, With the rural social security standards increased year by year, the transfer of income has become a future increase in per capita net income of rural residents a strong driving force. An Empirical Analysis on the Gap between Economic Growth and Urban-rural Income in Hefei City In this paper, a total of 19 years of data from Hefei to 2013 is cointegrated to establish the relevant error correction model. In the later analysis of this chapter, using Hefei urban and rural income ratio and per capita GDP to measure the economic growth and urban and rural income gap, respectively, with LCR and LGDP to show Hefei urban and rural income ratio and the per capita GDP of the right Value. Figure 2 shows that although the gap between urban and rural income in Hefei and per capita GDP in the beginning of a short period of time there is a certain rise, but in general, in most years, this relationship is generally negative To the relevant relationship, that is, with the rapid economic development of Hefei, Hefei urban and rural income than the decline, that is, urban residents and rural residents income gap decreased year by year. Figure 2. The Relationship between Urban and Rural Income Gap and Economic Development in Hefei City. The following began to establish LCR (urban and rural income ratio) and LGDP (per capita GDP) error correction model. First, the LCR and LGDP two time series to do the smoothness test, using the ADF unit root test method to verify the stability of the variable. For the stability test of LCR and LGDP, it can be seen that the absolute value of t statistic at 5% and 10% is less than the corresponding critical level, so that the sequence is non-stationary. And then continue to LCR and LGDP first-order difference, the analysis shows that at 5%, 10% of the two significant levels of the t statistic absolute value is greater than the corresponding critical level, so the differential sequence is a smooth sequence. Through the analysis of the above results, LCR and LGDP sequences are not stable, but their first order differential sequence is stable, so we can continue to covariance test. Engle-Granger two-step test is used here. After the LCR to LGDP regression, get the residual items, and then further to test whether the residual stability of the residue. And then the error correction model is established to carry on the further analysis, uses the OLS method to carry on the regression through Eviews, finally obtains the error correction model as follows: 187
(2.4029) (-3.9151) According to the results of the ECM model established above, when the per capita GDP of Hefei is increased by 1 unit, the urban-rural income ratio will drop by 0.14 units, that is, the urban-rural income gap will shrink. At the same time, the coefficient of error correction (ECM) is -0.635, which is significantly less than zero, which indicates that the long-term equilibrium relationship exists in Hefei's per capita GDP and Hefei urban-rural income ratio, and there will be about 63.5% Part can be adjusted in the next year. According to the results of the analysis, it is concluded that the economic growth of Hefei can narrow the income gap between urban and rural areas in Hefei. At the same time, the further analysis of these two variables shows that the long-term equilibrium relationship exists in Hefei's per capita GDP and Hefei urban-rural income ratio. This long-term stable equilibrium relationship is mainly manifested in the increase of per capita GDP in Hefei The income gap between urban residents and rural residents is gradually narrowing. Conclusion Hefei urban and rural residents income gap in the past 12 years in constant fluctuations in the change. This paper uses the cointegration theory to analyze the economic growth and urban-rural income gap in Hefei. It is found that economic growth can lead to the narrowing of urban-rural income gap. At the same time, further analysis of these two variables shows that there is a long-term stable equilibrium relationship between economic growth and urban-rural income gap in Hefei, and this long-term stable equilibrium is mainly manifested in the increase of Hefei's per capita GDP,the income gap between residents and rural residents is gradually narrowing. References [1] Kuznets, S. Economic Growth and Income Equality, M. American Economic Review, (1955) 1-28. [2] Su Su, Yunhe Song. A Study on the Income Gap between Urban and Rural Areas in China and Its Influencing Factors, J. Technical Economy, 12 (2010) 107-111. [3] Jiannong Wang, Qiliang Zhang. The Basic Characteristics and Tendency of Income Gap between Urban and Rural Residents, J. Statistical study, 3 (2005) 37-39. [4] Xiaolu Wang, Gang Fan. An Analysis of the Trend and Influencing Factors of China 's Income Gap, J. Economic Research, 10 (2005) 24-36. [5] Shaoping Wang, Zhigang Ouyang. The Measurement of Income Gap between Urban and Rural Areas in China and Its Effect on Economic Growth, J. Economic Research, 10 (2007) 44-45. [6] Yan Wang. Application of time series analysis, M. (2012). [7] Yanyang Yan, Meiping Song. Analysis of Kuznets Curve of Income Gap between Urban and Rural Residents in China and Its Influencing Factors, J. Soft Science, 09 (2011). [8] Hui Yin, Zeqiang Ni, Daofang Li. Analysis on the Influence of Modern Logistics on Anhui Regional Economic Development, J. Statistics and Decision, 13 (2011). 188