The effects of urbanization process on urban-rural income gap based on the feasible generalized least squares

This paper uses the method of empirical data to draw a trend analysis on the current situation and investigate the effect of urbanization on the income gap between urban and rural areas based on the data in 29 provinces in China from 1995 to 2010 and feasible generalized least squares method. Current situation analysis shows that urbanization is the important factors that affect the income gap between urban and rural areas. In the different stages of economic and social development, urbanization has different effect on the income gap between urban and rural areas. Empirical estimates show that urbanization significantly promoted China’s income gap between urban and rural areas. For east, middle and west regions, the influence of urbanization on the local income gap also exists significant differences. Results show that different areas adjust measures to local conditions, and push the rural economic and social development through the urbanization is becoming an important approach to narrowing the income gap between urban and rural areas of China. © 2015 SERSC.