Research on the Impact of Digital Empowerment on China’s Human Capital Accumulation and Human Capital Gap between Urban and Rural Areas

Abstract

Human capital is a key factor in the economic growth and sustainable development of a country. However, the impact of digitalization on human capital accumulation and the urban-rural human capital gap in China is seldom a focus in the literature. This paper establishes a three-sector economic growth model surrounding knowledge accumulation, endogenous technology, and labor mobility. It is designed to theoretically explain the influence of digital empowerment on human capital accumulation and its urban-rural gap in an economy. An empirical test is also conducted using CFPS panel data for 25 Chinese provinces from 2016 to 2018. The results show that: Firstly, digital empowerment significantly promotes the accumulation of human capital in rural and urban areas. The number of years of education increases by 1.37% in rural areas and 3.07% in urban areas for each index point of digitalization increase. Secondly, the impact of digitalization on the human capital gap between urban and rural areas demonstrates an inverted U-shaped curve. However, it is still within the Matthew Effect that the human capital gap between urban and rural areas is widening in tandem with digital development. Finally, the Matthew Effect in digitalization on the urban-rural human capital gap is relatively larger in the female group, higher education population, and larger family size.