Digital revolution and rural family income: Evidence from China

Abstract

This paper considers the relationship between the digital revolution and the income of rural households in China based on the difference-in-differences (DD) method. Using rich family survey data from the China Family Panel Studies (CFPS) from 2010 to 2018, I show that the digital revolution has a large positive effect on the income of rural households, an effect of approximately ¥1382 ($214) per year, which also applies for less-educated groups. My results can be explained by an increase in the frequency of internet use, especially in relation to work and business activities. The internet promotes China's rural transformation, such as increasing employment, entrepreneurship, and part-time work. In addition, the digital revolution has a direct impact on agricultural production income. This study highlights the importance of the digital revolution in reducing information costs, as it helps broaden channels for farmers to increase income and achieving inclusive regional growth.