Does Urban Shrinkage Inhibit Residents' Welfare? From the Perspective of Urban-Rural Development in China

Eliminating poverty and improving welfare are the value pursuit of global development. Based on the panel data of prefecture-level cities in China from 2010 to 2020, the path relationship among urban shrinkage, urban-rural development, and residents' welfare growth is empirically tested. The heterogeneity of urban shrinkage affecting residents' welfare are further revealed from multidimensional perspectives such as public financial pressure, attention to ageing cause, provincial capital welfare spillover, land expansion, and geographic differences. The research shows that: (1) Urban shrinkage not only directly inhibit residents' welfare, but also curb the improvement of residents' welfare through widening urban-rural income gap and strengthening urban-rural dual economic structure. (2) The higher the public financial pressure and the attention to the aging cause, the more obvious the inhibitory effect of urban shrinkage on the welfare. The welfare spillover of provincial capital cities show a distinct characteristics of distance attenuation. (3) The inhibitory effect of urban shrinkage on welfare growth is stronger in cities with a higher degree of land expansion. The inhibitory effect of the widening urban-rural income gap on welfare growth presents a V-shaped trend with land expansion. (4) The overall impact of urban shrinkage, urban-rural income gap, and urban-rural dual economic structure on residents' welfare is negative, and the spatiotemporal heterogeneity is significant. The impact of urban shrinkage on residents' welfare in seven cities of Hebei and Shandong province is at the stage of turning from negative to positive during the study period.