The Effect of Urban–Rural Public Service Gaps on Consumption Gaps Under the Perspective of Sustainable Development: Evidence from China

In the era of new urbanization and shared prosperity, addressing the entrenched contradiction between unequal urban–rural public services and consumption disparities is central to achieving sustainable urban–rural development. As the world’s largest developing country, China faces a pronounced urban–rural consumption gap, underscoring the urgency of narrowing this divide through improved urban–rural public services. This study constructs a theoretical framework to analyze how urban–rural public service gaps influence consumption disparities, developing an evaluation index system for public service gaps across three dimensions: basic education, healthcare, and social security. Using panel data from 26 Chinese provinces (2011–2023), we employed fixed effects (FE) estimation, two-stage least squares (2SLS), and two-step system GMM models to examine the impact of public service gaps on consumption disparities and explore heterogeneous effects across inter-period dynamics and economic catching-up levels. Findings show that the coefficients of the three public service gaps (education, healthcare, social security) on the consumption gap are positive and statistically significant. This indicates that further widening of urban–rural public service gaps will exacerbate consumption disparities. The urban–rural consumption gap exhibits a reinforcing effect: gaps in the previous period strengthen current-period disparities, forming a vicious cycle that hinders sustainable development. Heterogeneity analysis across time reveals that the impacts of healthcare and social security gaps on consumption disparities tend to weaken, while the effect of compulsory education gaps increases significantly. From the perspective of economic catching-up heterogeneity, regions with higher catching-up levels exhibit a stronger impact of public service gaps on consumption disparities compared to lower catching-up regions.