Abstract
<title>Abstract</title> <p>China's urban-rural income gap remains a persistent structural challenge, with rural residents earning substantially less than their urban counterparts. While human capital theory emphasises cognitive skills, emerging evidence suggests that non-cognitive abilities -- personality traits such as conscientiousness, agreeableness, and emotional stability -- may offer an alternative pathway for economic advancement among the disadvantaged. Using the 2018 China Family Panel Studies (N = 5,385), we compare non-cognitive returns across urban and rural hukou populations through OLS, conditional and unconditional quantile regression, and instrumental variable estimation. We find that non-cognitive abilities yield approximately four times larger income effects for rural earners than for urban ones, with the IV estimate reaching 19.8% per standard-deviation increase. Within the rural population, these benefits concentrate among low-income individuals, consistent with the compensatory advantage hypothesis. These findings indicate that non-cognitive ability cultivation represents an overlooked lever for addressing urban-rural inequality, warranting integration into education policy and rural development strategies.</p>