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Does digital infrastructure exacerbate income inequality? Evidence from the Broadband China Strategy

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  • Liang, Dong
  • Liu, Yu
  • Zhou, Meifang
  • Zhao, Luben
  • Li, Xinbei

Abstract

As an important initiative to advance digital infrastructure, implementing the Broadband China Strategy (BCS) has substantially impacted urban income inequality. This paper employs a staggered difference-in-differences model to examine the effects of BCS on income inequality, revealing a 1.95 % decrease in income inequality in pilot cities compared to non-pilot cities. The mechanism analysis indicates that the BCS affects income inequality through skill-biased technical progress and shifts in the labor skill structure, with the latter playing a dominant role. Heterogeneity analysis indicates the reduction in income inequality is more pronounced in eastern regions, large cities, non-resource-based economies, newer industrial bases, as well as cities experiencing low-skill-biased technical progress and rapid updates to labor skill structures. Additionally, a spatial Durbin model further identifies the significant spatial spillover effects of the BCS on income inequality.

Suggested Citation

  • Liang, Dong & Liu, Yu & Zhou, Meifang & Zhao, Luben & Li, Xinbei, 2025. "Does digital infrastructure exacerbate income inequality? Evidence from the Broadband China Strategy," Structural Change and Economic Dynamics, Elsevier, vol. 72(C), pages 360-373.
    • Handle: RePEc:eee:streco:v:72:y:2025:i:c:p:360-373
    DOI: 10.1016/j.strueco.2024.12.002
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