Inequality and Economic Growth: The Effect of Urban-Rural Roads Construction in China

This study investigates the effect of urban-rural roads construction on inequality. As the main roads connecting urban and rural areas, the urban-rural roads have greatly influenced the economic growth and poverty alleviation in rural areas. We collect the data of urban-rural roads from 2003 to 2021 and matched with the income inequality and night light intensity data, we find that the impact of urban-rural roads construction on inequality between urban and rural areas will first increase and then rebound, showcasing an inverted U-shaped curve. Further analysis shows that the inverted U-shaped trend could be attributed to the economic growth gap between urban and rural areas. The results in this study provide evidence that a developing country such as China could enhance urban-rural roads construction to reduce inequality between urban and rural areas.