Unintended Benefits: Impact of Place‐Based Policies on the Rural–Urban Income Gap in China's Old Revolutionary Base Areas

Yanan Li, Minglin Zhang and Huwei Wen

American Journal of Economics and Sociology, 2025, vol. 84, issue 5, 695-711

Abstract: Regional imbalances in economic development and the urban–rural income gap are major challenges to the sustainable development of developing countries. Using the place‐based policies of revitalization planning in China's old revolutionary base areas as a quasi‐natural experiment, this study examined the role of place‐based policies in income distribution between urban and rural areas in the typical less developed regions. Specifically, this study found that policy interventions significantly reduced the income gap between urban and rural residents. These findings implied that place‐based policies aimed at reducing regional imbalances also had unintended benefits in promoting equitable income distribution between urban and rural areas. Place‐based policies improved urban–rural income distribution through intermediary mechanisms such as improving public services, supporting agricultural development, and promoting the innovative development of the digital economy. The heterogeneity effect of regional characteristics was also found. In cities in western China, cities with large income inequality, and cities with slow urbanization, place‐based policies played a stronger role in reducing income inequality between urban and rural areas. Our findings help to optimize public policies in areas such as balanced regional economic development and income distribution, and have important implications for sustainable development in less developed regions.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ajecsc:v:84:y:2025:i:5:p:695-711

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