Social security, digital literacy, and relative poverty in China

Yan Li and Yuyang Huang

Finance Research Letters, 2025, vol. 71, issue C

Abstract: In the context of China's rapid economic development and digitalization, relative poverty persists as a pressing concern despite significant strides in poverty alleviation. While the role of social security in poverty reduction has been extensively studied, the potential moderating effect of digital literacy remains largely overlooked, particularly regarding individuals' ability to access and utilize social benefits effectively. To address this gap, we examine the interplay between social security, digital literacy, and relative poverty using data from the China Family Panel Studies 2020. Employing logistic regression models with interaction terms and addressing potential endogeneity, we find that social security coverage significantly reduces the likelihood of relative poverty. Crucially, digital literacy positively moderates this relationship, amplifying the poverty-reducing effect of social security for individuals with higher digital skills. This effect is particularly pronounced for low-income households and varies across regions. These findings highlight the need for integrated policy approaches that combine social protection with digital skill development to effectively combat relative poverty in the digital age, contributing to our understanding of poverty dynamics in digitalized societies and informing more targeted poverty reduction strategies.

Keywords: Social security; Digital literacy; Relative poverty; Moderating effect; Digital inequality; Heterogeneity analysis; China (search for similar items in EconPapers)
JEL-codes: I32 I38 J11 O15 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014752

DOI: 10.1016/j.frl.2024.106446

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