Digital rural construction and income inequality among farmers: the role of livelihood capital and digital divide

Introduction Following China’s eradication of absolute poverty in late 2020, relative poverty and income inequality among rural households have emerged as critical challenges for rural rejuvenation. Methods Anchored in the Sustainable Livelihoods Framework (SLF), this study utilizes2022 data from the China Land Economic Survey (CLES), employs the Kakwani Index to measure household income inequality and applies multiple regression and mediation models to analyze the impact of digital rural construction. Results Our findings indicate the following: (1) Digital rural development effectively boosts rural per capita income and mitigates household income disparities. This conclusion remains robust across a battery of robustness checks. (2) The mechanism analysis reveals that digital rural construction reduces income inequality by enhancing livelihood capital, in particular, human, material, social, and financial capital. The mediating effects of these four types of capital account for 10.22, 9.04, 7.85, and 13.56% of the total effect, respectively, and the effects of livelihood capital vary across income sources. (3) At the livelihood strategy level, digital rural construction has promoted the centralized, mechanized, and efficient development of agriculture, prompting some households to transition from agricultural production to non-agricultural employment. (4) The moderation analysis shows that household digital endowments strengthen the inequality-alleviating effect of digital rural construction, whereas the digital divide inhibits this effect. (5) Heterogeneity analysis further reveals that the inequality-reducing effects are shaped by geographic and household-level contextual factors. Discussion Policymakers should prioritize strengthening digital rural construction, supporting farmers in optimizing their livelihood capital and strategies, and narrowing the digital divide by improving access and enhancing digital literacy. These actions will help leverage the digital economy to narrow the income gap and promote the diversified development of the rural economy.