Trading and Staying: How E-Commerce Shapes Rural Labor Supply and Retention in China

E-commerce is reshaping rural economies in developing countries, yet micro-level evidence on its early effects on rural labor supply and retention remains limited. This study examines these effects in China, distinguishing between platform e-commerce (e.g., Taobao) and social e-commerce (e.g., WeChat) to uncover heterogeneous effects across different models and demographic subgroups. We employ a propensity score matching difference-in-differences (PSM-DID) method using two-period panel data from 3234 rural residents, covering the critical period of rural e-commerce emergence and expansion in China from 2013 and 2017. Results show that different e-commerce models shape rural labor allocation along both temporal and spatial dimensions. Platform e-commerce significantly promotes localized labor participation, while social e-commerce offers flexible entry points for vulnerable populations such as child-bearing, left-behind women. These findings offer lessons for inclusive digital development in developing countries facing rural labor outflow and digital divides.