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

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.

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Publication Details

Journal
Sustainability
Published
2025-10-14
DOI
https://doi.org/10.3390/su17209084
Primary Topic
Fiscal Policy and Economic Growth
Type
article
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article

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

Shaopeng Zhang, Zhijie Song
Sustainability
Fiscal Policy and Economic Growth
article

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

Shaopeng Zhang, Zhijie Song
article en

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.

SustainabilityVol. 17(20)
Beijing Normal University (CN), Northeast Forestry University (CN)
Openalex Percentile: Top 61%
Fiscal Policy and Economic Growth
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