From credit access to farmers’ income resilience: evaluating the impact of financial reform on urban–rural inequality and rural income stability

This study examines how China’s National Financial Comprehensive Reform Pilot Zones (NFCRPZs) affect the urban–rural income gap and enhance farmers’ income resilience. Using a staggered difference-in-differences design and county-level panel data from 2008 to 2022, we find that these financial reforms significantly narrow the income disparity by improving credit accessibility in rural areas. Mechanism analyses show that expanded credit supply promotes the adoption of advanced agricultural practices and facilitates rural labor transition to non-farm employment, which jointly boosts rural income levels and stabilizes income flows. Further evidence indicates that the reforms also reduce the volatility of rural household income, thereby strengthening income resilience. These results withstand rigorous robustness tests and demonstrate that well-targeted financial policies can simultaneously address income inequality and vulnerability, offering important insights for integrated rural development strategies.