Abstract:

Based on county-level panel data from 2003 to 2020, this paper examines the impact of the county-to-district reforms on the income gap between urban and rural residents and its mechanism of action. The research finds that the county-to-district reforms significantly widen the income gap between urban and rural residents, indicating that the reforms have produced an income distribution effect. Moreover, the widening effect is more pronounced in cities with lower administrative levels, or those that were county-level cities prior to the reform, and it is more fully manifested when the assessment of work related to agriculture, rural areas, and farmers is weaker. The mechanism analysis reveals that the county-to-district reforms disrupt the previously balanced allocation of policy attention between urban and rural areas within the original county, strengthen the urban-biased policy support, and thereby induce the widening of the income gap between urban and rural residents. Therefore, policymakers should be vigilant about the adverse impact of the county-to-district reforms on the income gap between urban and rural residents and mitigate their income distribution effect.

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