Income Allocation and Distribution Along with High-Speed Rail Development in China

The coordinated and balance development of economy attracts increasing attention not only on economic output, but also on residents’ wealth. This paper employs two types of wealth—income and deposits—to study the impact of high-speed rail opening and thereafter. We first perform a time-varying difference-in-difference method with 284 prefectural-level cities’ data from 2003 to 2018. The study shows that the impact of HSR connection has significant effects on wage and deposit within inner-city scale instead of the whole-city-wide. The evidence indicates that the launch of HSR promotes wage level through stimulating employment and financial development. While we observe a negative effect from HSR opening on deposits. The underlying mechanism is the deepening development of financial market which provides more choice of capital investment. With regard to heterogeneous effects across regions, the launch of HSR stimulates income growth in the central China significantly, compared to the eastern and the western. It also shows significant negative effects on central part residents’ deposit stock, indicating the development of financial market benefiting from HSR opening. This is in line with the “Rising strategy of Central China”. With respect to heterogeneity across cities with different output levels, HSR connections significantly promote wage level in developed cities, and drag down that in less developed cities. The negative HSR-deposit nexus is consistent across different city-tiers, indicating the development of financial market benefiting from HSR opening. Regard to the post-HSR period, the strength—indicated by degree centrality—of a HSR-connected city does not affect the local wage level. While it continues to facilitate financial development showing with a reduction in saving stocks. The complex HSR-wage-deposit nexus challenges authorities to establish a prefectural strategy on transportation infrastructure, particularly towards the coordinated development of income