Academic Journal of Business & Management, 2025, 7(3); doi: 10.25236/AJBM.2025.070321.
Dan Wu1,2, Yidan Liu3, Lu He4
1School of Economics and Management, Hainan Normal University, Haikou, China
2Hainan Provincial Key Laboratory of Ecological Civilization and Integrated Land-sea Development, Haikou, China
3School of Public Administration, Zhongnan University of Economics and Law, Wuhan, China
4School of Economics and Management, Hainan Normal University, Haikou, China
Based on individual relative deprivation theory and using data from the China Family Panel Studies (CFPS)2018, we examine the impact of Internet use on residents' income inequality from a micro-individual perspective. The conclusion is that Internet use reduces residents' income inequality, and the results stay robust after endogeneity. Further research finds that Internet access produces a more significant suppression of income inequality for the medium-education and rural household group of residents compared to the low-education and high-education groups. The analysis of the impact mechanism shows that the Internet can impact individual income inequality by influencing residents' personal risk preferences and education levels. Therefore, we suggest improving the Internet infrastructure, accelerating the penetration and integration of the Internet with various industries, and promoting healthy economic development with the income gap reduction effect of the Internet.
Internet; Income Inequality; Income Distribution; Income Deprivation
Dan Wu, Yidan Liu, Lu He. Internet Affects Income Inequality of Residents: An Empirical Analysis Based on CFPS Data. Academic Journal of Business & Management(2025), Vol. 7, Issue 3: 149-159. https://doi.org/10.25236/AJBM.2025.070321.
[1] Luo, C.L. (2019) .The missing top income group in household survey and the underestimation of income inequality. Economic Perspectives, 001, 15-27.
[2] Li, S., Terry, S. and Finn, T. (2020) .Income inequality in China: development,transformation and policy. Journal of Beijing Technology and Business University (Social Sciences), 35, 21-31．
[3] Gao, Y., Zhang, L. and Sun, J. (2018). Does computer penetration increase farmers' income? An empirical study from China. Telecommunications Policy, 42, 345-360.
[4] Cheng, M.W., Gai, Q.E., Jin, Y.H. and Shi, Q.H. (2016). Focusing on Human Capital Improvement and Income Growth. Economic Research Journal, 51, 168-181+192.
[5] Brockmann, H. and Atkinson, A.B(2008).The changing distribution of earnings in OECD countries.Oxford University Press.
[6] Goldin, C. and Katz, L.F(2007).The race between education and technology: the evolution of u.s. educational wage differentials, 1890 to 2005. Social Science Electronic Publishing.
[7] Forman, C., Goldfarb, A. and Greenstein, S. (2012).The internet and local wages: a puzzle. Am Econ Rev, 102, 556-575.
[8] Qiu, Z.Q., Zhang, S.Q. and Liu, S.D. (2019). From the Digital Divide to the Connectivity Dividend Difference: A Connectivity Capital Perspective.Social Sciences in China, 40, 93-115+203-204.
[9] Ma, D. and Chen, Z.L. (2020).Asymmetric Impact of RMB Real Exchange Rate on Income Inequality: An Empirical Test Based on NARDL Model. World Economy Studies, 312, 47-58+136.
[10] Ding, P., Wangdui, N.M. and Zhang.X. (2020).Foreign research progress on the effect of monetary policy on income distribution. South China Finance, 521, 13-23.
[11] Wei, F.C. (2014).The effect of individual income tax on labor income inequality. Taxation Research, 7, 35-38.
[12] Liu, Y., Teng, Y. and Zou, W. (2018).Taxes, economic growth and income inequality. Economic Science, 1, 21-36.
[13] Han, Y.D. and Fu, W.L. (2019).Vertical Fiscal Asymmetry and Income Inequality—The Threshold Effect of the Financial Transfer Payment Dependence. Finance&Trade Economics, 40, 40-54.
[14] Lai, D.S. (1997).Education expansion and income inequality. Economic Research Journal, 10, 46-53.
[15] Xue, J.J. and Gao, X.C. (2011).The Outcomes of Education on Income Growth and Income Disparity in Urban China. Chinese Journal of Population Science, 2, 2-13.
[16] Zhang, X.F., Pan X.X., Chen X.D. and Shi P.H. (2020).Education Public Expenditure and Income Inequality: An Empirical Study Based on Structural Threshold Regression Model. Macroeconomics, 1, 164-175.
[17] Lan, J.J., Wei X.H. and Wu C.L. (2020).The Effect of Population Ageing on Income Inequality: Evidence from 76 Countries,1970 -2011. Population Research, 38, 87-106.
[18] Liang, C. (2017).Does Family Planning Decrease Income Equality?: Evidence from CFPS. Population &Economics, 1, 116-123.
[19] Wang, P. (2018).The change of “Agricultural” to “Non-Agriculture”hukou, return of human capital and the earnings gap between new citizens and original residents. Society, 37, 217-241.
[20] Yang, J., Deng, D.S. and Shen, Y. (2019).Human Capital, Social Security and Income Inequality In China: Based on the Relative Income Deprivation. Insurance Studies, 6, 111-124.
[21] Ren, G.Q. and Shi, Y.C. (2016).The determinants of rural residents ' individual income deprivation in China—An empirical analysis based on CGSS2010 data. Journal of Agrotechnical Economics, 01, 48-59.
[22] LI, S, Xu, X.J. and JIA H.R. (2019).The imbalance of pension contribution in China and its impact on residents' income inequality. Journal of Beijing Technology and Business University (Social Sciences), 5, 92-103.
[23] Krueger, A. B.(1991). How computers have changed the wage structure: evidence from microdata, 1984-1989. NBER Working Papers.
[24] DiMaggio, Paul, Bonikowski and Bart. (2008).Make money surfing the web? the impact of internet use on the earnings of u.s. workers. Am Socl Rev.
[25] Tan, Y.Z., Li, Y.Z. and Hu, W.J. (2017).Digital Divide or Information Dividend: A Study on the Difference between Urban and Rural Income Returns by Informatization. Modern Economic Research, 10, 88-95.
[26] Jiang, Q., Wang, Y.B., Zhang, H. and Yue, A. (2018).The Effect of Internet Use on Personal Income in China: Evidence from CFPS Panel Data. Studies in Labor Economics, 6(05): 121-143.
[27] Li, Y.Q. and Xie, Q.Y. (2017).The impact of internet use on wage and wage distribution-based on CHNS data. Economic Theory and Business Management, 07, 87-100.
[28] Cheng, M.W. and Zhang, J.P. (2019).Internet Popularization and Urban-rural Income Gap: A Theoretical and Empirical Analysis. Chinese Rural Economy, 410, 19-41.
[29] Hu, A.G. and Zhou, S.J. (2012).A New Global Gap Between the Rich and the Poor: The Increasingly Widening “Digital Gap”. Social Sciences in China, (3), 34-48.
[30] Chen, S.Z. and Zhao, L.H. (2003).Digital divide and poverty and marginalization of least developed countries. QiuShi, 11, 57-59.
[31] Pandey, S.K., Hart, J.J. and Tiwary, S. (2003).Women's health and the internet: understanding emerging trends and implications. Social Science & Medicine, 56, 179-191.
[32] Anderson, R. H., Bikson, T. K., Law, S. A. and Mitchell, B. M. (2006).Universal access to e-mail: feasibility and societal implications. Edu Med Inter, 34, 86-87.
[33] Bauer and Johannes, M. (2018).The internet and income inequality: socio-economic challenges in a hyperconnected society. Telecommunications policy.
[34] Matanda, M., Jenvey, V. B. and Phillips, J. G. (2004).Internet use in adulthood: loneliness, computer anxiety and education. Beh Cha, 21, 103-114.
[35] Yang, J.,Lai, D.S. and Qiu, M.Y. (2015).What kind of education policy can reduce income inequality? Economic Research Journal, 09, 86-99.
[36] Wang, F.Q. (2010).Human Capital, Labor Market Segmentation and Income distribution. Society, 30, 109-126.
[37] Aghion, P. (1997).A trickle down theory of growth and development. Rev Econ Stu, 59.
[38] Dilip, M. and Debraj R. (2010).Persistent inequality. Rev Econ Stu, 2, 369-393.