Does the Adjustment of Industrial Structure Restrain the Income Gap between Urban and Rural Areas

Industrial structure adjustment is a process that involves reconfiguring input factors to enhance productivity and efficiency. A crucial aspect of this adjustment is the transformation of the labor force composition, which subsequently affects the employment structure. Consequently, variations in productivity levels lead to the cross-departmental migration of workers, resulting in changes to the income disparities among employees. This article examines the impact of China’s industrial structure adjustment and labor mobility on the urban–rural income gap between 1990 and 2019. Employing an empirical approach, the study investigates the influence of industrial structure adjustment and the direction of labor mobility on the urban–rural income gap. The findings indicate that the quality of industrial structure adjustment contributes to the widening of the urban–rural income gap, whereas labor mobility helps to narrow it. In regions experiencing a net influx of labor, superior industrial structure adjustment amplifies the urban–rural income gap, whereas labor migration diminishes it. Conversely, in regions witnessing a net outflow of labor, superior industrial structure adjustment reduces the income gap, while labor mobility widens the urban–rural income disparity. Notably, in more developed areas of China, the quality of industrial structure adjustment has widened the income gap, whereas labor mobility has narrowed the urban–rural income gap. However, in less developed regions, labor mobility exacerbates the urban–rural income gap.