The Impact of Digital Economy on Resident Income: The Mediating Role of Human Capital

Abstract

This research examines how the digital economy affects residents' incomes, highlighting the impact of human capital as a mediator as well as differences across regions. By analysing panel data for 30 provinces in China from 2012 to 2022, the study finds that the development of the digital economy significantly raises residents' incomes, a result confirmed by a series of robustness tests. Further analysis of the mechanisms found that the digital economy can also affect residents' income through the mediating effect of human capital. Based on these findings, governments need to take measures to ensure that the fruits of the digital economy benefit a wider range of groups, so as to avoid increasing income inequality. For example, it should promote digital agricultural technologies and e-commerce platforms in rural areas to increase farmers' incomes through technological empowerment; at the same time, it should strengthen social security for lower-skilled employment, for example, by providing basic old-age and healthcare protection for takeaway workers and online car drivers to reduce the risks faced by lower-skilled employment.