NEW INSIGHTS INTO THE DETERMINANTS OF THE URBAN-RURAL INCOME GAP IN CHINA

Abstract

This article analyzes the determinants of the urban-rural income gap in China by taking the
endowment structure as a starting point. The paper proposes a theoretical hypothesis and proves it with a
mathematical model, demonstrating that policy measures can effectively narrow the urban-rural income gap
by narrowing the urban and rural endowment structure gap. The authors used China's provincial panel data
from 2006 to 2019 to empirically test the theoretical model. The paper also summarizes previous literature on
the impact of industrial structure upgrading on the urban-rural income gap and unifies the impact of policy
factors and economic factors on the upgrading of the endowment structure to provide a general analytical
framework for studying their relationship. The study concludes that the fluctuation of the endowment structure
difference in urban and rural areas fundamentally determines the urban-rural income gap. Overall, the article
highlights the importance of narrowing the urban and rural endowment structure gap through policy measures
to reduce the urban-rural income gap in China.