The Impact of Urban Renewal Policies on Common Prosperity: A Difference-in-Differences Analysis Based on the “Three Reforms and One Demolition” Policy

Advancing urban renewal policies is a solid foundation for achieving common prosperity. This paper employs the difference-in-differences (DID) method along with mechanism analysis and uses panel data from 31 provincial-level administrative regions in China spanning 2003–2022. It empirically examines the net effect of urban renewal on common prosperity and explores the underlying mechanisms. The study finds that the “Three Reforms and One Demolition” policy significantly promotes common prosperity; this result remains robust after conducting parallel trend tests and other robustness checks. Moreover, the experience from the “Three Reforms and One Demolition” approach in Zhejiang Province provides significant insights for urban renewal policies in other regions.