The Impact of the Digital Economy on Income Distribution

Evidence from China

Bibliographic Data

ID22006331
AuthorsXing Xiong (0000-0002-9173-2527, Chongqing Technology and Business University, corresponding author), Lingwei Li (0000-0002-1818-6080, Chongqing University of Science and Technology, corresponding author)
Year2026
Volume16
Issue1
Publication date2026-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/21582440261416530
OpenAlexW7127053852
LanguageEN
Citations received1
References cited34

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

Agriculture · China · Digital economy · Income distribution · Panel data · Wage · Economic Growth and Development · Energy, Environment, Economic Growth · ICT Impact and Policies