Rural roads in narrowing regional income inequality: A quasi-natural experiment from China

Universal access to basic public services serves as a critical mechanism for reducing income inequality and advancing social equity. However, the potential of rural road infrastructure in realizing social equality remains inadequately addressed. Based on multi-year panel data, nighttime light data, and enterprise data from online platforms, this study explores the effect of the Chinese ‘Four Good Rural Roads’ project on income inequality for the first time, and further analyzes the crucial role of roads in promoting equality of opportunity and increasing county-level industries. We found that rural roads can significantly narrow the income gap at the county level and boost the development of local industries, and this effect has a significant spatial spillover effect and decreases with physical distance. Meanwhile, we also find that there is great heterogeneity in this effect across different regions. These findings indicate that building roads in underdeveloped rural areas can bring more benefits, fill in the shortcomings, and have a more significant impact on the income gap. So that governments should favour disadvantaged areas in road investment.