Impact of the digital economy on college graduates' return-to-hometown employment: Evidence from China

This study leverages push–pull theory and social capital theory and data from four waves (2016–2022) of the China Family Panel Studies to systematically investigate how the digital economy influences the return-to-hometown employment decisions of college graduates. The results offer several insights. First, the digital economy significantly increases the probability that graduates will return to their hometowns for employment, and this positive effect shows a consistent upward trend over the study period. Second, mechanism analysis reveals that the digital economy attracts graduates back home by primarily facilitating industrial upgrading in their hometowns, with this mediating pathway accounting for 45.73 % of the total effect. Third, social trust exerts a differentiated moderating effect: while particularized and generalized trust exert negative moderating effects, institutional trust not only directly encourages return decisions but also significantly amplifies the positive influence of the digital economy. Fourth, the promotional effect of the digital economy is more pronounced among students from central and eastern regions, with highly educated parents, and with bachelor’s degrees or below, as well as among female graduates. Fifth, the digital economy is fostering a structural shift toward entrepreneurship in return-to-hometown employment. Sixth, it significantly improves the settlement stability of returning graduates. Accordingly, this study suggests that accelerating industrial upgrading, enhancing the credibility of local governments, and optimizing the entrepreneurial environment are crucial to maximizing the digital economy’s role in supporting the return and retention of talent.