Economics

Urbanization can help reduce income inequality

G. Wan, X. Zhang, et al.

This paper by Guanghua Wan, Xiaoling Zhang, and Mengxue Zhao explores how urbanization can actually help decrease income inequality in developing countries, particularly the least developed ones. It challenges the common belief that urbanization worsens inequality by illustrating the positive effects of urbanization on narrowing the urban-rural income gap. The research advocates for well-managed urbanization as a key strategy in tackling poverty and inequality.

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Abstract

This paper investigates the impact of urbanization on income inequality in developing countries, particularly least developed countries (LDCs). It argues that fiscal measures are insufficient to address income inequality, especially in LDCs. The paper demonstrates that the urban-rural gap is a significant component of national inequality and shows the positive effects of urbanization in narrowing this gap. It challenges the conventional wisdom that urbanization increases inequality and proposes well-managed urbanization as a strategy to reduce income inequality and poverty, advocating for a shift away from anti-urbanization policies.

Publisher

npj Urban Sustainability

Published On

Jan 01, 2022

Authors

Guanghua Wan, Xiaoling Zhang, Mengxue Zhao