A Study On The Impact Of China’s Digital Economy Development On The Social Income Distribution Gap

As China enters a new stage of development,narrowing the social income distribution gap is an important task for resolving the principal social contradiction and achieving common prosperity for all people.Over more than forty years of reform and opening up,China’s economy has achieved rapid growth,and the battle against poverty has been comprehensively won,completing the arduous task of eliminating absolute poverty.However,numerous developmental issues that have accumulated and emerged in the economy and society,especially the increasingly widening income distribution gap,have become new characteristics and requirements brought about by the change in the main social contradiction.The widening gap in urban-rural development,regional imbalances,and income polarization among different industries have led to a continuous expansion of the income gap,which not only increases the difficulty of achieving the goal of common prosperity but also affects social harmony and stability.In the process of promoting high-quality development,leveraging digital technology to drive technological revolution and industrial transformation is of great significance for solving the social income distribution issue and grasping and realizing the strategic goal and practical approach to common prosperity.Digital technology has brought about revolutionary changes in the economy and society and has become an important engine for promoting sustained and stable economic growth and accelerating social transformation.Currently,China is in a historical overlapping period of striving to narrow the income distribution gap,promote common prosperity,and achieve rapid development of the digital economy,with accelerating the construction of digital China also being an important pathway to high-quality economic development.In the digital era,the digital economy not only provides new momentum for China’s economic transformation but also reshapes the innovation ecosystem,industrial layout,and employment structure,profoundly affecting economic and social development across multiple dimensions,making its function in the field of income distribution complex.Therefore,clarifying the impact pathways of digital economy development on the social income distribution gap has significant theoretical and practical implications for narrowing the social income distribution gap.Based on a systematic review of existing research and theories,this paper conducts an in-depth study on the theoretical foundations,internal mechanisms,pathways of influence,and policy implications of China’s digital economy development on the social income distribution gap from the perspective of regional economic development,deeply clarifying the comprehensive effect of the "digital dividend" and the "digital divide" on the social income distribution gap.The main research contents are as follows:First,regarding the mechanisms through which the digital economy impacts the income distribution gap,it plays a key and multidimensional role in adjusting income disparities.First,the development of the digital economy can enhance the efficiency and quality of information transmission,reduce the costs and losses in information exchange,and promote the equal development of basic public services.This not only can decrease the cost of information exchange between different regions and industries but also,by optimizing resource allocation,can effectively narrow the income gap between urban and rural areas,regions,and industries.Second,the digital economy can help reduce the income gap between different regions,urban and rural areas,and industries by incentivizing industrial digitalization and the free flow of factors.However,this process is accompanied by an unavoidable digital divide and a suction effect that may negatively impact income distribution.Third,the digital economy fosters advanced industrial development,leading to differences in short-term and long-term effects.In the short term,employment "polarization" might widen the income disparities between industries,while over time,as industrial structures rationalize and resources are optimally allocated across industries,converging labor productivity across industries could narrow the income gaps between urban and rural areas,regions,and industries.Second,from the analysis of the current situation,during the period from 2011 to2021,the level of digital economy development in China has been rapidly improved,and at the same time,the overall social income distribution gap has shown a gradually decreasing trend.In terms of the state of digital economy development,the level of digital economy development has continued to rise overall and has become an important driving force for the healthy development of China’s economy.As the scale of the digital economy continues to expand,there is a development trend of the eastern region leading and driving growth,with the central and western regions continuously catching up.Regarding the state of the social income distribution gap,it shows a gradually decreasing development trend overall.First,the dilemma of the urban-rural dual economic structure has been alleviated,with the spatial income distribution gap showing a trend of gradually decreasing from west to east;second,the problem of unbalanced and uncoordinated regional development has been partially solved,but in the process of reducing the regional income distribution gap,there is a regional heterogeneity characteristic of a larger gap in the central and western regions and a smaller gap in the eastern region;third,the industry income distribution gap over time shows a fluctuating downward trend,with the highest industry income gap in the eastern regions,followed by the western regions,and the lowest in the central regions spatially.Third,from the empirical research results at the urban-rural level,the impact of the digital economy on the urban-rural income distribution gap exhibits an inverted U-shaped characteristic,that is,as the level of digital economy development continues to improve,it first widens and then narrows the urban-rural income distribution gap.From the mechanism analysis results,the digital economy can reduce the urban-rural income distribution gap through the rural-urban integration effect of reduced communication costs and the rural revitalization effect of agricultural technological progress,but it can widen the urban-rural income distribution gap through the employment substitution effect of industrial structure upgrading.At the same time,the government can enhance the restraining effect of the digital economy on the urban-rural income distribution gap by increasing transportation infrastructure construction and improving marketization levels.Fourth,from the empirical research results at the regional level,the impact of the digital economy on regional income distribution gaps exhibits an inverted U-shape,that is,the effect on income distribution gaps first widens and then narrows.From the mechanism analysis results,the digital economy can reduce regional income distribution gaps through the spatial spillover effect of knowledge and information and the structural optimization effect on the labor market,while at the same time,it can also widen regional income distribution gaps through the suction effect of factor flows between regions.Looking at the spatial effects,first,there is spatial absolute convergence in China’s regional income distribution gaps,meaning there is a tendency for regions with larger income distribution gaps to converge towards regions with smaller gaps within the sample area.Second,there is a significant spatial agglomeration between regional income distribution gaps and the digital economy.Third,the spatial spillover effect of the digital economy on regional income distribution gaps is significantly negative,indicating that local digital economy development can significantly reduce the regional income distribution gap in neighboring areas.Finally,by decomposing the spatial effects,it is verified that local digital economy development can reduce not only the regional income distribution gap within the local area but also in neighboring areas.Fifth,from the empirical research results at the industry level,the impact of the digital economy on industry income distribution gaps exhibits nonlinear characteristics,that is,as the level of digital economy development increases,the effect of the digital economy on industry income distribution gaps presents an inverted U-shape.Specifically,the impact of the digital economy on industry income distribution gaps includes both narrowing and widening effects.Further analysis reveals that the narrowing effect exhibits a trailing characteristic,while the widening effect shows a truncating characteristic,with the widening effect being stronger than the narrowing effect only in some regions.Additionally,in conducting a heterogeneity analysis of the net effect,it is found that the net effect value first decreases and then increases over time,and spatially,the net effect value shows clear spatiotemporal differentiation characteristics.Looking at the pathways of impact,the digital economy can widen industry income distribution gaps through a skill-bias effect,while digital service equalization can significantly reduce industry income distribution gaps.The marginal contributions of this paper could be summarized as follows.Firstly,existing research has already demonstrated the important role of the digital economy in reducing income distribution disparities.However,whether this effect remains consistent over time has not been thoroughly explored.Based on an analysis of the fundamental characteristics of the digital economy and the logic behind its impact on reducing income distribution gaps,this paper investigates the inverted U-shaped effect of digital economy development on income distribution disparities across urban-rural,regional,and industrial levels from the perspectives of digital dividends and digital divides.Furthermore,it analyzes the reasons behind this effect,providing empirical evidence for addressing income distribution issues in the context of Chinese-style modernization.To some extent,this study enriches the theoretical research on the income distribution effects of digital economy development.Second,this paper advances beyond the common use of panel analysis methods for baseline regression analysis in existing research on the digital economy and income distribution.By targeting the characteristics of different dimensions such as urban-rural,regional,and industrial,the paper adopts empirical analysis methods to more scientifically verify the nonlinear impact of the digital economy on social income distribution disparities.Utilizing correlation analysis,panel regression methods,threshold effect models,and mediation mechanism models,it comprehensively examines the causal relationship between digital economy development and urban-rural income distribution disparities.The use of Arc GIS spatial mapping methods,spatial effect models,and various baseline regression methods clearly reflects the regional income distribution patterns and the spatial effects of digital economy development on regional income distribution disparities.Additionally,applying bilateral stochastic frontier analysis models,nonlinear analysis models,and various mechanism testing methods allows for an in-depth examination of the reduction and expansion effects of digital economy development on industrial income distribution disparities.This approach complements existing research.Third,this paper further refines the Digital Economy Development Index,optimizing the measurement method to more accurately represent the state of digital economy development.Additionally,based on defining the connotations of income distribution,the paper constructs the Urban-Rural Theil Index,Regional Gini Coefficient,and Industrial Gini Coefficient to measure income distribution disparities across urban-rural,regional,and industrial dimensions,respectively.This approach aims to more accurately investigate the complex mechanisms through which the digital economy impacts income distribution disparities,thereby providing empirical evidence and policy insights for addressing income distribution issues in the digital age.