Impact of Higher Education Expansion on the Urban-Rural Income Gap in China: An Empirical Analysis based on Provincial Panel Data

Abstract

With selected provincial panel data from 2004-2018 and a fixed-effects model, this paper conducts an empirical study on the impact of higher education expansion on the urban-rural income gap in China, and examines the heterogeneity between the Eastern, Central and Western regions. Those empirical findings show that higher education expansion significantly reduces the urban-rural income gap. In addition, factors including the upgrading industrial structure, increased openness, higher investment in education, and stronger government support for agriculture also significantly reduce the gap. Finally, the results reached by this paper are robust, proven by replacing the explaining variables and robustness tests on those explained variables. Therefore, prioritizing higher education is an important policy option to help reduce the urban-rural income gap and increase awareness of higher education in rural areas.