Impact of financial inclusion on the urban-rural income gap—Based on the spatial panel data model

•Impact of financial inclusion on the Urban-Rural Income Gap•Financial inclusion system has the effect of widening the urban-rural income gap under the consideration of spatial factors•Urban-rural income gap widens with the increase of financial inclusion level when the financial inclusion is at a low level•Urban-rural income gap becomes narrowed with the increase of financial inclusion development when it reaches a certain level This paper attempts to empirically test the relationship between financial inclusion and the urban-rural income gap using a spatial panel data model. We find that the development of the financial inclusion system widens the urban-rural income gap under the consideration of spatial factors. With regard to the regional analysis, we find that when the level of financial inclusion is low, the urban-rural income gap widens as the level of financial inclusion increases. And the urban-rural income gap narrows with the increase of financial inclusion when the financial inclusion reaches a certain level.