Abstract: By applying China’s dynamic CGE model, this paper makes use of agriculture-focused disaggregated social accounting matrix of 2012 to simulate the impact of agricultural technical progress on the absolute and relative income gaps between urban and rural residents. The findings show that agricultural technical progress will exacerbate absolute income gap between urban and rural residents in the medium term, while narrowing the gap in the long term. In all the simulation periods, agricultural technical progress will narrow the relative income gap between urban and rural residents. Compared with neutral technical progress, the effect of the biased technical progress is more significant in reducing the income gap. Through influencing the factors reward allocation of both urban and rural residents, the elasticity of factor substitution can determine the effects of agricultural technical progress reducing the urban-rural income gap. The conclusion of this study can provide a basis for the related authority to select an optimal path of agricultural technical progress.

Key words: agricultural technical progress; absolute income gap; relative income gap; dynamic CGE model