The impact of Internet use on income inequality: evidence from China

The digital economy has accelerated Internet diffusion in China and may offer new opportunities to reduce income inequality. Using 2015, 2017, and 2019 China Household Finance Survey (CHFS) data, we examine how Internet use relates to household income and the income gap. The results show that Internet use is associated with significantly higher income and, at the same time, helps narrow overall income inequality. On average, Internet users earn about 17.35% more than nonusers, and the income-enhancing effect varies across different income groups. Further analysis shows that Internet use can increase household income by promoting entrepreneurship.