Urban-rural Income Inequality Research Articles

Chance or challenge? Understanding how the Internet affects the nexus between tourism and urban-rural income inequality

The nexus between tourism and income inequality has received much attention but no consensus emerged. It is of interest to explore how this nexus is affected by the important external condition of the Internet. This study examines the spatial threshold effect of the Internet on the nexus between tourism and urban-rural income inequality by developing a spatial threshold model. Using panel data for 280 Chinese cities from 2003 to 2019, the results show that the impact of the Internet is characterised by clear spatial thresholds, and the local and spatial spillover effects of tourism on urban-rural income inequality vary under different regimes of Internet development. Further, by differentiating the Internet’s functions, the inequality-reducing effect of tourism in local and surrounding cities has strengthened significantly as cities’ Internet penetration improves; meanwhile, this effect has increased first and then decreased as cities’ online market penetration deepens, with a relative optimal interval.

Effect of Entrepreneurship on Urban-Rural Income Inequality in China

ABSTRACT Entrepreneurship is a two-edged sword, promoting economic mobility for some but potentially leading others into poverty. This research explores the effect of entrepreneurship on urban-rural income disparity in China, utilizing data collected in 265 Chinese cities from 2013 to 2019. Using a two-step System Generalized Method of Moments (GMM) for dynamic panel data, we found that entrepreneurship consistently reduces income inequality across various income levels in different digitalization environments. The findings underscore the significance of entrepreneurship in narrowing the disparity in income between urban and rural areas. Policies would be adaptable to the challenges and opportunities in different locations, with the goal of creating a favorable climate for the growth of both urban and rural economies.

The Impact of Land Property Right on China’s Rural-Urban Migration

After the founding of the People's Republic of China (PRC), private ownership of land in rural areas was abolished, and land was collectively owned. However, the Chinese government issued several policies to protect the rights and interests of farmers. The most representative of these are the Household Responsibility System (HRS) and the Rural Land Contracting Law (RLCL). In this paper, we study the impact of land management systems on population migration under market mechanisms (ability to rent land) and government mechanisms (land expropriation). And we used the Probit model to conduct regression analysis to verify the impact of land management systems on population migration and used robustness tests to ensure the stability and validity of the data. The results show that allowing land to be rented out has a positive effect on population migration, while land acquisition by the government has a negative effect on population migration. It proves that the Three Rights Division (TRD) system proposed and implemented by Chairman Xi Jinping, which forms ownership, contracting, and management rights to protect the rights of agricultural business entities, helps reduce urban-rural income inequality, helps upgrade the industrial structure of urban industries, and maintains economic expansion and increases China's long-term development potential.

How does the natural disasters affect urban-rural income gap? Empirical evidence from China

Preventing the impact of natural disasters on urban-rural income inequality helps to achieve shared prosperity. This paper uses the functional entropy weight method to calculate the level of natural disasters from 2004 to 2020. Then, this paper discusses the impact of natural disasters on the urban-rural income gap. The empirical results are as follows. (1) Natural disasters have expanded the urban-rural income gap. The regression coefficient is 0.2663, which is significant at the 1% level. (2) In areas with a high proportion of the rural population, the impact of natural disasters is more prominent. (3) Mechanism analysis indicates that natural disasters have widened the urban-rural income gap by restraining rural investment and agricultural production. Finally, this paper suggests strengthening investment in the agricultural sector to mitigate the negative impact of natural disasters.

Study on Urban-Rural Income Inequality in China—Based on VAR Model

Wealth disparity is a complex issue that has plagued the world for many years. China’s economic development has achieved world-renowned results during the last 40 years. Over that time, the country has risen from extreme poverty to the world’s second-largest economy. Nevertheless, the significant wealth inequality accompanying it has also caused great concern. At the start of China’s reform and opening-up period, government officials tacitly approved of this uneven development and made plans to “drive the rich first to the rich later” in pursuit of economic development. Economic development aims to achieve shared prosperity, not to deprive the relatively poor of wealth. As a result, wealth disparity in China must be addressed. Based on the Kuznets hypothesis, the theory of urban-rural dual structure, and the current situation in China, this paper has evaluated the current wealth gap in China. Since 1978, Chinese households’ wealth accumulation has come from the income gap. Private property was not allowed to exist during China’s planned economy period (1949-1977). After the reform and opening up period (After 1978), income disparities between various industrial sectors led to an initial round of wealth accumulation for many Chinese citizens. The industrialisation process and urbanisation rate significantly impacted China’s economic modernisation and growth. Therefore, this paper has analysed the effects of several factors on income disparity in China. The examined factors were; economic development, the urbanisation rate, and the industrialisation process. Based on the theoretical analysis, this paper selected time series data from 1978 to 2021, including; per capita GDP, the per capita disposable income of urban and rural residents, the urban population to total population ratio, and industry contribution to the GDP. First, an analysis of the impact of economic development on income inequality was conducted using a static model. Then, a VAR model was built through ADF and PP testing, and an impulse response and variance analysis were conducted to explain the impact of various factors on the change rate of income inequality. The study results indicated that (1) Economic development has resulted in a significant increase in the income of urban and rural residents. However, urban residents have benefited more. Simultaneously, the income gap between urban and rural areas has grown significantly alongside economic expansion. (2) Urbanisation showed little effect on the income gap in the short term; however, it increased it in the long term. (3) Industrialisation reduced the short- and long-term income gap while increasing urbanisation.

Research on the Family Income Gap in China

This paper will start with an investigation of the current consumption situation (consumption structure) and the consumption concept of college students at Chongqing University, and investigate the family income, the monthly living expenses of students (whether there is a work study program) and the current loan situation of college students. Based on this problem, this study plans to use the questionnaire and literature survey methods to investigate the income gap of the families behind the college students through the consumption survey. Through the investigation and sorting of consumption, we can see the family income reflected thereby, and compare the gap between the rich and the poor reflected from different angles. This paper further considers the current consumption situation of college students and what consequences the income gap has brought or will bring, as well as the reasons affecting the income gap. At this stage, particular attention should be paid to the issue of urban-rural income disparity and inequality. In the context of Chinas dual economy, household income inequality mainly comes from inequality between urban and rural areas. Effectively improving the income level of rural residents and narrowing the urban-rural gap are the main targets for achieving common prosperity. To achieve common prosperity, first, improve the income distribution system and the macro income distribution structure. Second, increase the income of low-income groups and accelerate the formation of an olive-shaped structure. Third, improve the social security system to alleviate the challenge of excessive income disparities among groups. Fourth, promote the equalization of basic public services in urban and rural areas, and address income inequality. Fifth, increase public investment in human capital and enhance social mobility.

The Impact of Climate Change on the Urban–Rural Income Gap in China

Based on the annual average climate data and economic and social data from 262 prefecture-level cities in China from 2001 to 2019, this paper explores the impact of climate change on urban–rural income inequality and its mechanisms using fixed-effects (FEs) and mediated-effects (MEs) models. This study finds that (1) climate change has an inverted U-shaped relationship with the urban–rural income disparity; (2) climate change can affect the urban–rural income disparity by influencing urban and rural income levels, the regional degree of urbanization, and the labor force employment structure; (3) the impact of climate change on the urban–rural income gap is heterogeneous in East, Center, and West China; and (4) extreme heat can widen the urban–rural income gap, and extreme drought can narrow the urban–rural income gap. Climate change has a significant impact on the urban–rural income gap, and there is a need to continue to promote urbanization and the optimization of the employment structure of the workforce, reduce the vulnerability of rural residents to climate change, and narrow the urban–rural income gap.

Research on the Impact of Inclusive Finance on Urban-rural Income Inequality in the Context of Rural Revitalization

Inclusive finance has the inherent advantage of fostering rural regeneration. As a result, the role of financial institutions in promoting regional revitalization, which is a national strategy, will be fully clarified, and the income disparity between urban and rural areas can be further reduced. Based mainly on Williamson's concept of economic management, this project analyzes the interaction between the development of inclusive finance and rural regeneration in our country, especially the income gap between urban and rural areas. Conduct comprehensive diagnostic research on the current state of financial inclusion by focusing on analyzing the development status and challenges of inclusive finance in rural areas and clarifying the importance of further development of inclusive finance. Second, taking into account the lessons learned from foreign indicators of comprehensive financial development, the indicators of comprehensive financial development should be considered, taking into account indicators such as financial geographic penetration, financing through product contact, and user friendliness. Establishing a system for measuring the degree, building indicators of rural comprehensive finance based on six perspectives, and based on the data analysis of the above indicators, the development of comprehensive finance will affect the income growth rate between urban and rural residents. We will continue to study the effects on inequality and try to prove that: The development of inclusive finance can effectively reduce the income gap between urban and rural residents. Villagers conclude that inclusive finance plays a positive role in facilitating the expected completion of rural regeneration. Finally, it proposes rationalizations for inclusive finance to play a greater role in reducing the income gap between urban and rural areas.

Does energy transition help narrow the urban-rural income gap? Evidence from China

With climate change and inequality concerns being the twofold challenge for societies, vigorously facilitating the pace of energy transition in parallel to promoting social justice is addressed by global societies. Using an empirical analysis of 30 provinces in China, we examine how the pace of multi-dimension energy transition influences urban-rural income gap. It starts from an assessment of China's energy transition performance by constructing a comprehensive index framework. Then we investigate the impacts of the energy transition on the urban-rural income gap by employing panel data of China's 30 provinces from 2008 to 2019. Our results demonstrate a significant upward trend in China's overall energy transition performance. Meanwhile, this paper highlights the positive but heterogenous contributions of the energy transition to narrowing the urban-rural income gap. We also gauge the positive moderating effects of energy transition and various targeted transition policies and environmental factors on the urban-rural income gap in China, such as the clean heating and PV-based poverty alleviation project; but the negative effect of coal phaseout policy cannot be ignored. Our findings in the context of urban-rural income inequality in China provide practical insights and pertinent policy implications to deepen understanding of the global just energy transition.

A step toward inclusive green growth: can digital finance be the main engine?

Inclusive green growth (IGG) has become a worldwide consensus to achieve the target of sustainable development goals. Although the prominent role of digital finance (DF) against the pandemic has drawn considerable attention from policymakers, its plausible effect on IGG and underlying mechanisms have not been distinctly explored in academia. The aim of the study is to explore the causal effect of DF on IGG based on prefecture city-level data from 2011 to 2019 in China. To this end, we employed the non-radial direction distance function approach within the global production technology to evaluate the aggregate IGG performance and its three sub-dimensions. The empirical results demonstrate that DF exerts a significant promotional effect on urban IGG. This finding continues to survive in an extensive set of robustness checks using an alternative dependent variable, model specifications, instrumental variable, and difference-in-difference approaches to address the endogeneity concerns. Meanwhile, sub-dimensional regressions show that this positive effect is driven predominantly by the scale economy of DF, while the depth of usage and digitalization playing a minor role. Moreover, we uncover that DF enhances IGG by leveraging greater marginal product of labor rather than capital, improving environmental externalities, increasing fuller employment, and reducing rural-urban income inequality. However, we also reveal the dark side of DF on imbalanced regional development. The promotional effect of DF on IGG is only prominent for cities with better inherent comparative advantages, and we are thus likely to see a widening digital divide resulting from the "Matthew effect" on regional disparity without timely policy interventions.

Digital dividend or digital divide? Digital economy and urban-rural income inequality in China

This study investigates the impact of the digital economy on income inequality between urban and rural areas. Panel data covering 194 cities in China from 2011 to 2018 are employed to construct a digital economy development index using the entropy value method. Nonlinear and threshold models are executed to ascertain how digital economy development influences the urban-rural income gap in China. The results reveal a U-shaped relationship between the digital economy and the urban-rural income gap. Furthermore, the threshold effect analysis demonstrates a digital divide in diverse regions due to different urbanization stages. This study furnishes empirical evidence for attaining balanced urban-rural development in the digital economy in developing countries.

The impact of technology and finance on urban-rural income inequality

Based on the panel data of 30 provinces, cities directly under the jurisdiction of the central government (except for Tibet) and regional autonomous areas from 2011 to 2020, this paper uses the entropy method to measure the index of science and technology finance, and applies the double-fixed model to explore the impact of science and technology finance on urban-rural income inequality. The empirical results show that: (1) Technology finance has a U-shaped influence on rural-urban income inequality. (2) The greater the gap between urban and rural financial development levels will increase urban-rural income inequality; the greater the gap between higher education levels and health care institutions will decrease urban-rural income inequality significantly. (3) There is a heterogeneity in the impact of science and technology financial development on rural-urban income inequality; science and technology finance in the eastern and western areas will have a U-shaped impact on rural-urban income inequality, while science and technology finance in the central area will have an inverted U-shaped impact on rural-urban income inequality. Based on this, this paper offers some suggestions for the development of science and technology finance in China to further reduce rural-urban income inequality.

Urbanization and Urban-Rural Income Inequality in Latin America

Urbanization and Urban-Rural Income Inequality in Latin America

Development of Platform Economy and Urban–Rural Income Gap: Theoretical Deductions and Empirical Analyses

Against the historical background of the burgeoning platform economy and the promotion of common prosperity, this paper focuses on the impact of the development of the platform economy on the urban–rural income gap. Theoretical mechanism analyses are conducted from three aspects such as nonlinear action of the platform economy on the urban–rural income gap, the rural human capital level-based moderating effect, and the spatial spillover effect. Moreover, empirical analyses are carried out using the threshold model, interaction model, and spatial lag model in turn with panel data of 31 provinces in China from 2013 to 2020. The results of the study show that there is a significant double threshold effect of the development of the platform economy on the urban–rural income gap. The initial development of the platform economy can improve urban–rural income inequality, and the scale effect of the platform will further contribute to the reduction in the urban–rural income gap, but the expansion of market share and the deepening of monopoly will have a suppressive effect on the urban–rural equilibrium. There is a moderating effect of rural human capital in the platform economy in reducing urban–rural income inequality. The increase in the level of rural human capital will enhance the driving effect of the platform economy on the reduction in the rural–urban income gap. There are spatial spillover effects for the impacts of the platform economy on the urban–rural income gap and it positively promotes the coordinated development of urban and rural areas in neighboring provinces. Based on the above results, this paper makes policy proposals from three aspects such as perfecting the system and standard of the platform, improving the rural human capital level, and optimizing platform-based regional cooperation.

International trade and urban-rural income inequality in China

ABSTRACT The issue of income inequality has persisted for decades in China, rendering it one of the world’s most unequal countries. Given the increasing significance of international trade in China, it is important to understand whether it widens urban-rural income inequality. This paper aims to investigate the causality between international trade and the urban-rural income gap in China through the Granger causality test. We found that variables including foreign direct investment, dependence on exports, and GDP can cause urban-rural income inequality, while urban-rural income inequality causes rural income growth. Our results contribute to the controversial literature on income inequality with a focus on the urban-rural difference.

Climate warming risk and urban-rural income inequality: Evidence from prefecture-level cities in China

Climate warming risk and urban-rural income inequality: Evidence from prefecture-level cities in China

Can place-based policies reduce urban-rural income inequality? Evidence from China’s Old Revolutionary Development Program based on county-level data

Reducing urban-rural income inequality (URII) is a prerequisite in promoting people’s welfare and realizing sustainable development for many developing countries. However, virtually little is understood about how place-based policies affect URII. To fill this void, we utilize China’s Old Revolutionary Development Program (ORDP)—a large-scale and novel type of place-based policy targeted at undeveloped regions, as a natural experiment and use the time-varying difference-in-differences (DID) model to evaluate the effect of ORDP on URII and further investigate its potential mechanisms and heterogeneity effects. The panel data covering 613 Chinese counties from 2010 to 2019 are used. Our results show that ORDP can lead to an average of 11.2% decrease in URII, but this effect takes a period to emerge. Mechanism analysis presents that ORDP mitigates URII chiefly through government intervention and financial development. Further heterogeneity analysis casts light on the fact that ORDP exerts a greater role in alleviating URII in old revolutionary counties that are located in western and central China compared to those located in eastern China. Additionally, the effect of ORDP on URII is greater in undeveloped counties compared with developed counties. Our findings provide enlightenment for the government in China and other developing countries on how to mitigate URII through well-designed place-based policies.

Digital financial inclusion and the urban–rural income gap in China: empirical research based on the Theil index

This study examined the effect of digital financial inclusion in reducing the urban–rural income inequality in China. Based on city-level panel data, the results showed that digital financial inclusion narrowed the urban–rural income gap significantly by boosting economic growth. The results were robust when the core explained variables were replaced. Heterogeneity analysis showed that digital financial inclusion indicates regional differences in narrowing the urban–rural income gap. This study puts forward corresponding countermeasures for the development of digital financial inclusion and adds to the research on this very topical subject.

The Impact of FDI on China’s Urban–Rural Income Gap

Since the reform and opening up some forty years ago, China has suffered from a capital shortage problem. To both solve this problem and satisfy its economic and social needs, China has been bringing in foreign investment, much of which has gone toward economic reconstruction. However, with the continuous inflow of foreign direct investment (FDI) into China, not only has the gap between rich and poor become increasingly wide but, due to China’s unique dualistic economic structure, the gap between urban and rural areas also appears to be widening. This aspect of the problem has attracted the attention of scholars around the world, as it may affect the future sustainable development of China’s economy and society. Cognizant of the need for practical solutions, this study conducts a more in-depth study of the relationship between foreign direct investment and the urban–rural income gap in China. Based on a review of previous studies and panel data from 30 Chinese provinces, this paper argues that FDI will affect this income gap through mechanisms such as employment structure, industrial structure and international trade. The findings of this study suggest that FDI inflows will first improve income inequality between urban and rural Chinese at a point in time but then have a worsening effect. In addition, China’s three major economic zones are examined, with results showing that the overall impact of FDI on the urban–rural income gap in China displays an inverted ‘U’ curve. Today, the impact of FDI on the urban–rural income gap is on the right-hand side of the curve, with regional differences in its impact. Urban–rural income inequality in the eastern region responds the most to FDI.

The Impact of Different Levels of Income Inequality on Subjective Well-Being in China: A Panel Data Analysis

Income inequality is one of the most serious issues globally and China is the representative examples of this issue. Income inequality remains high in China and may negatively affects subjective well-being. This study clarifies whether income inequality affects subjective well-being in China. Using five waves of the 2010-2018 data from China Family Panel Studies, a panel data analysis reveals the following: First, general income inequality measured by provincial Gini coefficients has a significant U-shaped impact. Second, between-group income inequality, measured as income ratio between urban hukou residents and migrants with rural hukou, has a significant U-shaped impact. Third, urban-rural income inequality measured by provincial urban to rural household per capita income ratio has an inverted-U-shaped impact. To address endogeneity problems of income inequality, this study adopts instrumental variable approach. For the further robustness checks of the validity of the instrumental variable used, this study adopts the recent Conley et al. (2012) bounds approach. Our results are robust after addressing endogeneity problem. One important policy implication stemming from our results is the need to adopt strategies that ensure a more inclusive society without hukou-related and urban–rural discrimination.