The Study of Reason for Urban-rural Income Gap in China:Based on the Angel of Income Sources

In 1978~2010 China's urban-rural income gap is in upward trend in overall.The results of decomposition of income sources shows the contribution of wage income is the highest and the contribution of operating income and transfer income have showed the shift in the trend.By constructing the econometric model the results showed that the overall increase in education levels leads to narrow wage income gap.However,uneven development of urban and rural education leads to wide the operating income gap.The urbanization expand the gap between wage income.The expansion of degree of financial development between urban and rural areas further leads to wide the operating income and transfer income gap.Generally,implementation of the urban and rural education equity,balanced development of urban and rural finance and accelerate the urbanization process is necessary policy option.