Internet use and rural income inequality: evidence from China

Abstract

The integration of the digital transformation of agriculture and China’s ‘dual-carbon’ strategy for agriculture is new momentum for developing agriculture, reducing rural income inequality, and improving the subjective well-being of farm households. This paper uses data from the China Family Panel Studies (CFPS) in 2014, 2016, and 2018 to examine the impact of internet use on rural income inequality at the household level. The results show that internet use can significantly reduce rural income inequality by enhancing information availability and farm households’ nonfarm employment level. The results of a heterogeneity analysis reveal that the internet is more conducive to improving the income inequality of rural burdened families and families in Western China. Further analysis shows that improving income inequality can enhance the subjective well-being of farmer households. Accelerating the construction of digital villages, building internet skills cultivation systems, and focusing on the utility of internet use among vulnerable rural groups can reduce rural income inequality.