Abstract: By making use of the data of 26 provinces and adopting the fixed effects model, this paper studies the impact of urban-rural integration on the urban-rural income gap from the two aspects of urban-rural economic development integration and urban-rural social development integration. The results show that there exists narrowing effect in the urban-rural social development integration, while urban-rural economic development integration has expanding effect on urban-rural income gap, and the expanding effect is far smaller than the narrowing effect. Therefore, the urban-rural integration has generally expanded the urban-rural income gap. Further research finds out that the expanding effect comes from the fast flowing of rural production factors into cities during the raising of urbanization ratio, while the narrowing effect comes from the balanced development of urban-rural health and social security. Therefore, during the process of urban-rural integration, the policy focus of narrowing urban-rural income gap is to further promote the investment in rural public goods, improve the equality of the urban and rural education, balance the development of the social security system, and at the same time construct a mechanism to promote the urban and rural bi-direction flowing of production factors.

Key words: urban-rural integration; income gap; balanced development