Regional Cooperation and the Urban–Rural Income Inequality: Evidence from China’s East–West Cooperation Program

Zhijie Song and Shaopeng Zhang ()
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Zhijie Song: Business School, Beijing Normal University, Beijing 100875, China
Shaopeng Zhang: School of Economics and Management, Northeast Forestry University, Harbin 150040, China

Sustainability, 2025, vol. 17, issue 20, 1-25

Abstract: Persistent regional imbalances and widening urban–rural income gaps hinder progress toward Sustainable Development Goal 10 (Reduced Inequalities). In response, China has implemented a typical regional cooperation program—East–West Cooperation (EWC). Using a balanced panel of 642 western counties from 2013 to 2020 and the staggered difference-in-differences (DIDs) model, we assess the impact of EWC on the urban–rural income gap. We show that EWC narrows the urban–rural income gap, primarily by increasing rural incomes rather than changing urban incomes. Mechanism analyses indicate that expanded rural employment and higher agricultural production efficiency are the principal channels. The greater the economic disparity and the shorter the distance between paired counties, the stronger the effect of EWC. This effect is particularly pronounced in southwestern assisted counties and in agriculture-intensive assisted counties. The above evidence suggests that horizontal regional cooperation can deliver equity-enhancing growth. Policy should prioritize rural-first resource allocation, employment-oriented labor cooperation, and agricultural upgrading, while refining pairing rules to account for the magnitude of economic gaps and geographic proximity.

Keywords: regional cooperation; urban–rural income inequality; less-developed regions; reduced inequalities; SDG10; East–West Cooperation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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