Huimin Insurance and unequal economic welfare between urban and rural areas: evidence from Chinese cities

Background: The popularization and promotion of Huimin Insurance provide new solutions to alleviate the urban-rural consumption gap and unleash consumption vitality, thereby stimulating domestic demand. Methods: This article is based on panel data from 224 cities in China from 2015 to 2023. It uses a multi-period DID method to examine the impact of Huimin insurance on the urban-rural consumption gap. Results: The research results indicate that at the macro-level, the implementation of Huimin insurance is significantly correlated with the narrowing of the urban-rural consumption gap, and this result remains significant after a series of robustness tests. Heterogeneity analysis found that this effect is significant in cities with lower levels of economic development, and further strengthens in Huimin insurance products with higher levels of protection and more participating underwriting institutions. The results of the mechanism test show that the promotion of Huimin insurance may affect the preventive savings behavior of rural residents, thereby affecting the urban-rural consumption gap. Further analysis shows that the Huimin insurance is significantly correlated with the improvement of rural residents' consumption level, while its correlation with urban residents' consumption is not significant. Conclusion: The research conclusion of this article verifies the inclusive nature of Huimin insurance at the macro level, providing empirical evidence for understanding the potential role of Huimin insurance in narrowing the urban-rural consumption gap and promoting consumption equity. It should be pointed out that due to the lack of microdata, research results may be influenced to some extent by ecological fallacies and aggregation biases. The relevant conclusions mainly reflect macro average correlations, and there are certain boundaries in their explanatory range. Based on this, this article believes that it is necessary to further optimize the institutional design and implementation path of Huimin insurance on the existing basis, and fully exert its universal effect.