Opening to the Outside World and Income Gap between Urban and Rural Areas Based on Panel Data of 30 Provinces and Cities

Abstract

Opening to the outside world has an impact on Income gap between urban and rural areas. From the perspective of internal transmission mechanism, opening to the outside world has promoted the redistribution of labor force between urban and rural areas and the increase of rural residents' wages while adjusting the industrial structure. From the perspective of external transmission mechanism, trade openness has a significant impact on Income gap between urban and rural areas through the regulation of transportation infrastructure. Based on the above analysis, this paper explores the specific impact mechanism of opening to the outside world on income gap between urban and rural areas. Using Theil index to construct an index to measure the income gap between urban and rural areas, this paper empirically explores the impact of opening to the outside world on Income gap between urban and rural areas through adjustment effect test and mediation effect test, and further explores the impact of various influencing factors on income gap between urban and rural areas and the specific transmission mechanism.