Can New-Type Urbanization Construction Narrow the Urban-Rural Income Gap? Evidence from China

To promote economic development, an imbalance in urban-rural development has been caused by a policy of favoring urban areas in every county. Recently, breaking the "urban-rural dual structure" and emphasizing urban-rural "integration" have become the ideal models for most countries to realize sustainable urbanization development. In China, the main goals of new-type urbanization construction (NTUC) are to optimize the urban-rural structure and improve the living standards of rural residents, help narrow the urban-rural income gap (URIG), and realize urban-rural sustainable development. This paper mainly studied the effect of NTUC on the URIG, analyzing the dynamic impact and regional heterogeneity. The moderating effect of NTUC on the URIG was also tested. A difference-in-difference model and mediating effect model were used to investigate the impact of the NTUC on the URIG. We found that, firstly, NTUC can significantly reduce the URIG. After a series of robustness tests was implemented, the results still held. Secondly, the effect of NTUC on the URIG was -0.1684 in the short term and -0.1710 in the long term. NTUC can significantly reduce the URIG in the central and western regions, but the negative impact is insignificant in the eastern region. Thirdly, industrial structure upgrades and financial and digital development are all important ways that NTUC narrows the URIG. Finally, based on our research conclusions, we put forward corresponding countermeasures and suggestions related to the policy implementation of NTUC, regional differences, industrial structure upgrading, and financial and digital development.