Digitalization and Urban-Rural Income Dynamics: The Joint Effects of Digital Dividend and Digital Divide

• In Event: Inequality, Poverty, and Mobility Section Roundtables
  In Refereed Roundtable (60 minute): 10. AI and Technology

Abstract

Digitalization, encompassing advancements in information and communication technology (ICT) and the rise of artificial intelligence (AI), serves as a pivotal force shaping social structures and deepening economic inequalities globally. Despite the potential for digitalization to enhance productivity and create new economic opportunities, it may also deepen existing inequalities. This study investigates the complex relationship between digitalization and income distribution, particularly within the context of China’s urban-rural income gap from 2008 to 2020. Using panel data from Chinese cities, we find that while digitalization produces a “digital dividend” that increases the average income for both urban and rural residents, it also generates a “digital divide” that disproportionately and increasingly benefits urban populations over rural ones over time. The findings underscore the need for targeted policies that address these disparities and foster more equitable growth in the new digital economy.
Key words: digitalization; economic inequality; urban-rural income gap; digital dividend; digital divide; China

Authors

• Junru Chen, Department of Sociology

• Ling Zhu, The Chinese University of Hong Kong