The Impact of Urbanization Level on Residents' Income: A Comparative Analysis between China and the United States

Abstract

This paper selects balanced annual time series data spanning 2010 to 2024 to compare how urbanization shapes household disposable income in China and the United States. This particular time window captures critical economic shifts including post-financial crisis recovery, Sino-U.S. trade tensions and public health shocks, which creates a realistic context for horizontal comparison. China underwent rapid rural-to-urban population relocation during the period, while the U.S. entered a mature urbanization stage with stagnant urban population ratios. Divergent institutional rules, labor mobility mechanisms and industrial layouts create obvious gaps in the income spillover generated by city expansion. Parallel first-difference regression frameworks are constructed for two nations to quantify the marginal impact of urbanization through descriptive statistics, stationarity diagnostics and two rounds of robustness verification. Regression outputs prove urban growth significantly lifts household income in China, yet delivers no measurable contemporaneous pay gains in the U.S. Lagged urban population inflows even slightly suppress American residents’ earnings. Such gaps arise from hukou constraints, uneven high-end service development and differentiated urbanization stages. Most prior cross-country studies end samples in 2017 and rely solely on qualitative analysis; this paper fills the gap with post-pandemic quantitative evidence and targeted urbanization policy suggestions for China.