The Impact of the Digital Economy on Income Distribution: Evidence from China

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Authors: Xing Xiong, Lingwei Li
Cited by: 1
References: 34

Abstract

This study examines how digital economic development affects income distribution in China, using panel data from 31 provinces between 2011 and 2021. Employing a two-way fixed effects model and robustness tests, it finds that the digital economy significantly increases household income, primarily through wage growth. However, the effects are uneven across different groups. Urban residents benefit more than rural ones, widening the urban–rural income gap. Regionally, the eastern provinces experience greater income gains than central and western areas. Industry-wise, high-digital sectors such as mining, finance, and energy see stronger effects, while traditional sectors like agriculture and public services show limited impact. Non-state-owned enterprises also gain more than state-owned ones, due to their flexibility and adaptability. These findings suggest the digital economy brings both opportunities and challenges—enhancing income overall but also contributing to inequality. Policy recommendations include improving digital infrastructure in less-developed areas, supporting digital upskilling, and strengthening regulations to ensure inclusive and equitable digital development.

Fields of Study & Subjects

Energy Environment Economic Growth ICT Impact and Policies Economic Growth and Development

Publication details

Journal / source
SAGE Open
Publisher
SAGE Publications
Volume
16
Issue
1
Publication date
1 January 2026
Language
EN