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Urbanization and the Urban–Rural Income Gap in China: A Continuous Wavelet Coherency Analysis

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  • Yiguo Chen

    (National Academy of Economic Strategy, Chinese Academy of Social Sciences (CASS), 9F, Zhongye Dasha, No.28, Shuguangxili, Chaoyang District, Beijing 100028, China
    Research Center of Hubei Financial Development and Financial Security, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan 430205, China)

  • Peng Luo

    (School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan 430205, China)

  • Tsangyao Chang

    (Department of Finance, Feng Chia University, Taichung 40724, Taiwan)

Abstract

This study applies wavelet analysis to examine the relationship between the urbanization and the urban–rural income gap in 31 provinces in China over the period 1978–2019. We find three patterns of causality between urbanization and the urban–rural income gap. Empirical results show that urbanization does Granger-cause an urban–rural income gap, the urban–rural income gap does Granger-cause urbanization, and there exists a two-way causality between the urban–rural income gap and urbanization. Furthermore, these relationships mainly exist at high frequencies (short term). The results obtained by considering the resident population are more significant than those by the registered population. These results could help local governments develop fair policies for urban and rural income distribution in the process of urbanization of different provinces, promoting the coordinated development between urban and rural areas.

Suggested Citation

  • Yiguo Chen & Peng Luo & Tsangyao Chang, 2020. "Urbanization and the Urban–Rural Income Gap in China: A Continuous Wavelet Coherency Analysis," Sustainability, MDPI, vol. 12(19), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:19:p:8261-:d:424751
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    References listed on IDEAS

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    Cited by:

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    2. Bingyang Han & Zhili Ma & Yong Liu & Mengmeng Wang & Yingchao Lin, 2021. "Effect of Urban-Rural Income Gap on the Population Peri-Urbanization Rate in China," Land, MDPI, vol. 10(11), pages 1-22, November.
    3. Yuxin Meng & Lu Liu & Qiying Ran, 2022. "Can Urban Green Transformation Reduce the Urban–Rural Income Gap? Empirical Evidence Based on Spatial Durbin Model and Mediation Effect Model," Sustainability, MDPI, vol. 14(24), pages 1-24, December.
    4. Jianxu Liu & Xiaoqing Li & Shutong Liu & Sanzidur Rahman & Songsak Sriboonchitta, 2022. "Addressing Rural–Urban Income Gap in China through Farmers’ Education and Agricultural Productivity Growth via Mediation and Interaction Effects," Agriculture, MDPI, vol. 12(11), pages 1-23, November.
    5. Jiang, Changjun & Li, Jintao & Liu, Jilai, 2022. "Does urbanization affect the gap between urban and rural areas? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    6. Da Fang & Yan Guo, 2021. "Induced Agricultural Production Organizations under the Transition of Rural Land Market: Evidence from China," Agriculture, MDPI, vol. 11(9), pages 1-24, September.

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