New-type urbanization policy, urban expansion, and employment quality in chinese cities: evidence from a quasi-natural experiment in China

Rapid urbanization has reshaped China’s labor market, but whether policy-led urbanization can improve job quality rather than merely expand employment remains unclear. This study investigates whether and through what channels the New-type Urbanization Pilot Policy (NTUPP) improves urban employment quality in China. We construct an annual panel of 287 prefecture-level cities covering 2007–2021 and exploit the staggered rollout of the NTUPP as a quasi-natural experiment. We estimate policy effects using a staggered difference-in-differences design with city and year fixed effects, supplemented by heterogeneity-robust estimation, dynamic event-study analysis, and a series of robustness tests.The results show that the NTUPP increases urban employment quality by approximately 12.13% on average relative to the counterfactual. Mechanism analyses indicate that the policy effect operates primarily through human-capital accumulation and factor-market development. Urban spatial structure also conditions policy effectiveness: compact development and vertical expansion strengthen the employment-quality gains associated with the NTUPP, whereas excessive horizontal sprawl weakens them. The effects are more pronounced in eastern, southern, coastal, and transportation-hub cities. In addition, the policy is associated with lower intra-city inequality, as reflected in reductions in the urban–rural income gap and the Theil index. These findings suggest that new-type urbanization policies should move beyond population concentration and land expansion. Policymakers should strengthen equal access to education, skills training, and basic public services; deepen labor, land, and capital market reforms; integrate land-use, transport, and industrial planning to promote compact and employment-oriented urban development; and coordinate policy implementation across neighboring cities to reduce spatial inequality and potential displacement effects. Such measures can help sustain inclusive employment gains while advancing decent work and sustainable urban development.