Exploring the Effect of Internet Usage on the Urban Rural Income Gap: Empirical Evidence from China

Qin Mingshuai (), Dong Hao (), Chen Hong (), Qin Lijian () and Qin Wenshuai ()
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Qin Mingshuai: PhD Student, Technical University of Ostrava, Studentská 1770/1, Poruba-Ostrava, Czech Republic
Dong Hao: Lect. University of Southampton, Building 2, 12 University Road, Highfield, Southampton, United Kingdom
Chen Hong: Assoc. Prof., Anhui University of Finance and Economics, #962 Caoshan Road, Bengbu City, Anhui Province, China
Qin Lijian: Prof. Anhui University of Finance and Economics, #962 Caoshan Road, Bengbu City, Anhui Province, China
Qin Wenshuai: Master’s student, Philippine Christian University - Manila, 1648 Taft Ave.cor Pedro Cil, Malate Manila, Republic of The Philippines

Management Theory and Studies for Rural Business and Infrastructure Development, 2023, vol. 45, issue 4, 453-466

Abstract: China has witnessed remarkable ongoing digitalization with the rapid spread and adoption of the Internet. However, this remarkable development remains uneven between urban and rural populations, and hence result in different impact on their income. Employing data China General Social Survey 2018, this study explores how internet usage affects income gap between the urban and rural China. Relying on the instrumental variables approach to regression analysis, we prove that internet usage contributes to higher increase in annual income for the urban employed compared to their rural counterparts. The RIF decomposition regression results then reveal the effects of differential urban-rural internet usage ratios, explaining the widened income gap between the urban and rural employed in various income levels. The difference in the returns to urban and rural internet usage narrowed the urban-rural income gap for low - and high- income employed, but further contributed to the urban-rural income gap for the middle-income employed.

Keywords: China; Internet usage; RIF decomposition regression; Urban-rural income gap (search for similar items in EconPapers)
JEL-codes: J31 R00 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:mtrbid:v:45:y:2023:i:4:p:453-466:n:5

DOI: 10.15544/mts.2023.44

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