A study on the relationship between rural-urban income gap and human capital investment disparity in China: A case study on Yunnan province

This paper, taking Yunnan Province as an example, examines the relationship between rural-urban income gap and human capital investment disparity in China by using ADF test, EG co-integration test and error correction model. The study finds that: firstly, a bi-directional Granger causality existed between the human capital investment gap and income gap in the urban and rural areas of Yunnan Province throughout the period 1991-2010, there existed a positive correlation between the two variables. secondly, the human capital investment gap between urban and rural areas in Yunnan Province was just the one-way Granger causality of the income gap in the short term. Finally, this paper put forward some relevant countermeasures and proposals.