Digital divide, social security, and relative poverty in Chinese households

Tong Wu

International Review of Economics & Finance, 2024, vol. 96, issue PC

Abstract: Digital inequality has emerged as a critical socioeconomic challenge in the era of rapid technological advancement, particularly in developing economies transitioning from absolute to relative poverty reduction. While extensive research has explored various dimensions of the digital divide, limited attention has been paid to its causal relationship with relative poverty and the potential mitigating role of social protection systems. This knowledge gap is particularly significant in China, where despite remarkable progress in poverty alleviation, the interplay between digital exclusion, social security, and relative poverty remains understudied. Herein, we employ a multi-method approach combining instrumental variable analysis, propensity score matching, and quantile regression using the China Family Panel studies 2020 data to examine these relationships. Our findings reveal that the digital divide significantly increases the likelihood of relative poverty, with a one standard deviation increase in digital exclusion associated with a 5.3 percentage point higher probability of experiencing relative poverty. Notably, social security coverage moderates this relationship, reducing the marginal effect of digital exclusion by 0.65 percentage points for each additional social protection program. These results advance our understanding of technological inequality by demonstrating how institutional factors can mediate the relationship between digital exclusion and economic outcomes, while highlighting the need for integrated policy approaches that combine digital inclusion initiatives with enhanced social protection measures to address emerging forms of poverty in increasingly digitalized societies.

Keywords: Digital exclusion; Relative deprivation; Social protection systems; Regional inequality; Technological disparities; Institutional mediation (search for similar items in EconPapers)
JEL-codes: H55 I32 O33 R58 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pc:s1059056024007081

DOI: 10.1016/j.iref.2024.103716

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