The Digital Economy and Common Prosperity: Empirical Evidence from Multidimensional Relative Poverty in China

Ping Wang, Ruisheng Zhang and Lu Liu ()
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Ping Wang: School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China
Ruisheng Zhang: School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China
Lu Liu: School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China

Sustainability, 2025, vol. 17, issue 19, 1-25

Abstract: The swift advancement of the digital economy presents new pathways toward achieving common prosperity in China. Based on microdata derived from the China Family Panel Studies (2010–2022), this study employs the “Broadband China” pilot policy as a quasi-natural experiment to explore how digital economy development influences multidimensional relative poverty. We develop a multidimensional relative poverty index encompassing economic, health, education, and living condition aspects utilizing the Alkire–Foster dual cutoff method and employ a staggered Difference-in-Differences design for empirical analysis. Results show that the policy leads to an average decrease of 1.8 percentage points in the probability of multidimensional relative poverty across households. The effect is more pronounced in central and western regions, rural households, and those with a high proportion of non-labor force, particularly in the dimensions of economic, health, and living conditions dimensions. Mechanism analysis via interaction term regression indicates that increased population mobility and improved informal employment are key channels. These findings suggest that enhancing digital infrastructure and tailoring mobility and employment policies to fit regional and urban–rural contexts can effectively alleviate multidimensional relative poverty. This study contributes empirical evidence connecting the advancement of the digital economy to poverty alleviation and aligns with the United Nations Sustainable Development Goal 1 (No Poverty).

Keywords: digital economy; common prosperity; multidimensional relative poverty; informal employment; population mobility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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