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A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover

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  • Luo, Haotian
  • Hu, Qing

Abstract

In the context of the era of common prosperity, this paper seeks to explore the influence of human capital on the urban-rural income gap in China. To accomplish this, this paper utilizes panel data encompassing 31 provincial-level administrative regions spanning the years 2000 to 2019. Employing a combination of econometric techniques, including 2SLS, Difference-in-difference models, moderating effects models, and the spatial Durbin model, this paper investigates various facets of human capital and its impact on the urban-rural income gap. The key findings of this paper are as follows: (1) The relationship between human capital and the urban-rural income gap exhibits a U-shaped pattern. (2) The college enrollment expansion policy leads to the widening of the urban-rural income gap in China driven by factors related to the scale, quality, and inequality within higher education. (3) The digital economy plays a positive moderating role in the U-shaped relationship between human capital and the urban-rural income gap. (4) Human capital's impact on the urban-rural income gap demonstrates a significant spatial correlation, displaying a U-shaped spatial spillover effect. Drawing from the aforementioned findings, this paper offers valuable policy implications to guide policymakers in their efforts to foster the attainment of common prosperity.

Suggested Citation

  • Luo, Haotian & Hu, Qing, 2024. "A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 494-519.
    • Handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:494-519
    DOI: 10.1016/j.eap.2023.12.018
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    More about this item

    Keywords

    Human capital; Urban-rural income gap; College enrollment expansion; Digital economy; Spillover effect;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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