Impact of nonagricultural employment on the income gap between rural and urban areas in China

Narrowing the urban–rural income gap and promoting the nonfarm employment of rural laborers are critical to the common prosperity. As such, they have become issues of great concern and urgency. This paper analyzed the theoretical mechanism through which the nonfarm employment of the rural labor force affects the urban–rural income gap and empirically examined it using provincial panel data from 1993 to 2022. The results revealed that the nonfarm employment rate of China's rural labor force contributes to the convergence of the urban–rural income gap, and the impact of the nonfarm employment rate of the rural labor force on the urban–rural income gap exhibited a “U-shaped” trend of decreasing first and then increasing. At the national level, the current nonfarm employment rate of rural labor in China did not cross the inflection point.