Influence of high-speed railway network on individual income: evidence from China’s microeconomic data

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Influence of high-speed railway network on individual income: evidence from China’s microeconomic data

Zhang, Meng-ting / Yu, Feng / Zhong, Chang-Biao / Tang, Yi-hong

China’s increasingly developed high-speed railways (HSR) network has been found to have important influences on economic development, but analysis of its effect on individual income is inadequate. Based on the data of Chinese Household Income Project Survey (CHIP07 and CHIP13) and China’s HSR data, this paper examines HSR’s influence on residents’ income and the underlying mechanism. Using the difference-in-differences (DID) approach, we document that the connection of HSR network increases both urban and rural residents’ income. Besides, to address the potential endogeneity, we construct the least cost path spanning tree network to be served as an instrumental variable (IV) of HSR and the results confirm the reliability of the conclusion. What’s more, a HSR-induced industrial restructuring mechanism is revealed by further study, and those who received the higher education is proved to benefit most from HSR. Therefore, education turns out to be an effective way to enhance HSR’s income effect.