Inclusive insurance development and common prosperity in the perspective of urban-rural income gap

ABSTRACT

There is still a sizable economic discrepancy in China between urban and rural areas, and closing this gap is crucial to fostering prosperity. The impact of inclusive insurance on the income gap between urban and rural areas has received little attention in the literature. We propose the China Inclusive Insurance Index (CII), which covers four dimensions and thirteen indicators, and has been used to conduct an empirical study on the impact and mechanism of China’s inclusive insurance development on the urban-rural income gap. The research finds the development of inclusive insurance significantly reduces the income gap between urban and rural areas, and its major mechanism is to smooth out income fluctuations and encourage investment in financial assets, physical capital and human capital.

KEYWORDS:

• inclusive insurance
• common prosperity
• China Inclusive Insurance Index
• urban-rural income gap

Acknowledgments

This study was supported by the Ministry of Education of Humanities and Social Science Project (22YJA790042). Thanks to the data support from the TFID and the data collection service provided by Hangzhou Woman Information Tech.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/14765284.2024.2334554.

Notes

1. The calculation formula is: $d_{\mathit{it}}=\left[X_{\mathit{it}}-\min \left(\mathit{X}\right)]/\left[max\left(\mathit{X}\right)-min\left(\mathit{X}\right)\right)\right]$ (1 ≤ i ≤ 285, 2011 ≤ t ≤ 2020),where $\mathit{\hspace{0.17em}}{d}_{\mathit{ijt}}$ denotes the standardized value of the $\mathit{i}$ city in year $\mathit{t}$, which should be between 0 and 1, $X_{\mathit{it}}$ denotes the original value of the $\mathit{i}$ city in year $\mathit{t}$.

2. Eastern region includes: Beijing, Fujian, Guangdong, Hainan, Hebei, Jiangsu, Liaoning, Shandong, Shanghai, Tianjin, Zhejiang; Central region includes: Chongqing, Anhui, Heilongjiang, Henan, Hubei, Hunan, Jiangxi, Jilin, Shanxi; Western region includes: Gansu, Guangxi, Guizhou, Inner Mongolia, Ningxia, Shanxi, Sichuan, Yunnan.

Additional information

Funding

This work was supported by the the Ministry of Education of Humanities and Social Science Project [22YJA790042].