IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i17p13170-d1231158.html

Can Digital Economy Drive Income Level Growth in the Context of Sustainable Development? Fresh Evidence from “Broadband China”

Author

Listed:
  • Dandan Kong

    (School of Economics, Anhui University, Hefei 230601, China
    Department of Economics and Management, Bozhou University, Bozhou 236800, China)

  • Jing Li

    (School of Economics, Anhui University, Hefei 230601, China)

  • Zehu Jin

    (School of Economics, Anhui University, Hefei 230601, China)

Abstract

In the context of the rapid development of digital economy and the promotion of sustainable development, this paper focuses on the impact of digital economy on income levels. Based on the panel data of 195 prefecture-level cities, the “Broadband China” pilot has been regarded as a natural experiment for the measurement of the digital economy. In this paper, a time-varying DID model was established to evaluate the influential effect of “Broadband China” on income growth. It was found that the coming into service of “Broadband China” has increased the overall income level of the Chinese labor force. Further research found that “Broadband China” has done more to raise the income levels of the high-skilled labor force, thus widening the income gap between the high-, medium-, and low-skilled labor force. “Broadband China” can affect the income growth via two mechanisms, namely, “increasing the entrepreneurship rate” and “leading to an increase in the overall number of professional and skilled labor force in China”. In this case, the entrepreneurship rate of the high-skilled labor force may be higher than that of the medium- and low-skilled labor force due to human capital accumulation. The rapid increase in the high-skilled labor force in technical industries will lead to the situation where their income growth effect is higher than that of the medium- and low-skilled labor force. Based on the above research results, this paper puts forward policy suggestions from three aspects: further accelerating the process of digital economy; improving the institutional environment of the broadband network and standardizing the order of the construction of the broadband network; and further stimulating the entrepreneurial motivation of labor force, paying attention to the problem of skill bias and optimizing the employment structure, balancing efficiency and equity, and contributing to the ultimate sustainable development of developing countries.

Suggested Citation

  • Dandan Kong & Jing Li & Zehu Jin, 2023. "Can Digital Economy Drive Income Level Growth in the Context of Sustainable Development? Fresh Evidence from “Broadband China”," Sustainability, MDPI, vol. 15(17), pages 1-21, September.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:17:p:13170-:d:1231158
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/17/13170/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/17/13170/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eva Militaru & Madalina Ecaterina Popescu & Amalia Cristescu & Maria Denisa Vasilescu, 2019. "Assessing Minimum Wage Policy Implications upon Income Inequalities. The Case of Romania," Sustainability, MDPI, vol. 11(9), pages 1-20, May.
    2. Park, Kang H., 1996. "Educational expansion and educational inequality on income distribution," Economics of Education Review, Elsevier, vol. 15(1), pages 51-58, February.
    3. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    4. Xiaodong Lu & Guowei Cai, 2011. "Effective Factor Endowments, Trade Openness and Income Distribution in China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 6(2), pages 188-210, June.
    5. Afesorgbor, Sylvanus Kwaku & Mahadevan, Renuka, 2016. "The Impact of Economic Sanctions on Income Inequality of Target States," World Development, Elsevier, vol. 83(C), pages 1-11.
    6. Puja Vasudeva Dutta, 2007. "Trade Protection and Industry Wages in India," ILR Review, Cornell University, ILR School, vol. 60(2), pages 268-286, January.
    7. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    8. Ali, Mohammad Afshar & Alam, Khorshed & Taylor, Brad & Rafiq, Shuddhasattwa, 2020. "Does ICT maturity catalyse economic development? Evidence from a panel data estimation approach in OECD countries," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 163-174.
    9. Daron Acemoglu, 2003. "Patterns of Skill Premia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 199-230.
    10. Xiaodong Lu & Guowei Cai, 2011. "Effective factor endowments, trade openness and income distribution in China," Frontiers of Economics in China, Springer;Higher Education Press, vol. 6(2), pages 188-210, June.
    11. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    12. Heng Li & Shangguang Yang, 2023. "The Road to Common Prosperity: Can the Digital Countryside Construction Increase Household Income?," Sustainability, MDPI, vol. 15(5), pages 1-19, February.
    13. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    14. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    15. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," The World Bank Economic Review, World Bank, vol. 11(1), pages 17-32, January.
    16. Robert E. Litan & Alice M. Rivlin, 2001. "Projecting the Economic Impact of the Internet," American Economic Review, American Economic Association, vol. 91(2), pages 313-317, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yunke Deng & Haixin Tao & Bolun Yao & Xuezhu Shi, 2025. "The Impact of Digital Infrastructure on Rural Household Financial Vulnerability: A Quasi-Natural Experiment from the Broadband China Strategy," Sustainability, MDPI, vol. 17(5), pages 1-25, February.
    2. Zhang, Meng & Wang, Hong & Wang, Hao & Osmadi, Atasya Binti, 2024. "Digital economy, land resource mismatch, and urban housing costs: Evidence from China's digital governance policy perspective," Resources Policy, Elsevier, vol. 92(C).
    3. 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.
    4. Li Chen & Hao Cheng & Fujia Li & Zihan Song, 2025. "Can Digital Infrastructure Construction Promote Energy Conservation in Resource-Based Cities? Evidence from the “Broadband China” Strategy," Energies, MDPI, vol. 18(18), pages 1-25, September.
    5. Li Yang & Yue Xu & Junqi Zhu & Keyu Sun, 2024. "Spatiotemporal Evolution and Influencing Factors of the Coupling Coordination of Urban Ecological Resilience and New Quality Productivity at the Provincial Scale in China," Land, MDPI, vol. 13(12), pages 1-22, November.
    6. Zhixin Zhang & Hongxin Xu & Zhen Qiao, 2024. "Has the Digital Economy Enhanced the Income Distribution Effect Among Industries? Evidence from China," Sustainability, MDPI, vol. 16(20), pages 1-20, October.
    7. Zhang, Kaixia & Bu, Caiqi, 2024. "The power of digitalization: A study of the effect of the digital economy on household energy poverty," Energy, Elsevier, vol. 313(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cao, Yuqiang & Hu, Yong & Liu, Qian & Lu, Meiting & Shan, Yaowen, 2023. "Job creation or disruption? Unraveling the effects of smart city construction on corporate employment in China," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    2. Lu, Jing & Xiao, Qinglan & Wang, Taoxuan, 2023. "Does the digital economy generate a gender dividend for female employment? Evidence from China," Telecommunications Policy, Elsevier, vol. 47(6).
    3. Zhou, Yuwen & Shi, Xin, 2025. "How does digital technology adoption affect corporate employment? Evidence from China," Economic Modelling, Elsevier, vol. 147(C).
    4. Kölling, Arnd & Mertens, Antje, 2020. "Exporting behavior and the demand for skills in German establishments," Working Papers 97, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    5. Raveh, Ohad & Reshef, Ariell, 2016. "Capital imports composition, complementarities, and the skill premium in developing countries," Journal of Development Economics, Elsevier, vol. 118(C), pages 183-206.
    6. Clark, Damon, 2023. "School quality and the return to schooling in Britain: New evidence from a large-scale compulsory schooling reform," Journal of Public Economics, Elsevier, vol. 223(C).
    7. Tang, Chang & Xu, Yuanyuan & Hao, Yu & Wu, Haitao & Xue, Yan, 2021. "What is the role of telecommunications infrastructure construction in green technology innovation? A firm-level analysis for China," Energy Economics, Elsevier, vol. 103(C).
    8. Mariana Pereira-López & Isidro Soloaga, 2015. "External returns to higher education in Mexico 2000-2010," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 1-34, May.
    9. Thomas J. Holmes & Matthew F. Mitchell, 2008. "A theory of factor allocation and plant size," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 329-351, June.
    10. Krenz, Astrid & Prettner, Klaus & Strulik, Holger, 2021. "Robots, reshoring, and the lot of low-skilled workers," European Economic Review, Elsevier, vol. 136(C).
    11. Leyla Mocan, 2014. "The Impact of Education on Wages: Analysis of an Education Reform in Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1424, Koc University-TUSIAD Economic Research Forum.
    12. David J. Deming & Mikko I. Silliman, 2024. "Skills and Human Capital in the Labor Market," NBER Working Papers 32908, National Bureau of Economic Research, Inc.
    13. Åsa Johansson & Eduardo Olaberría, 2014. "Global Trade and Specialisation Patterns Over the Next 50 Years," OECD Economic Policy Papers 10, OECD Publishing.
    14. Wenchao Jin, 2022. "Occupational polarisation and endogenous task-biased technical change," Working Paper Series 0622, Department of Economics, University of Sussex Business School.
    15. Dou, Bin & Guo, SongLin & Chang, XiaoChen & Wang, Yong, 2023. "Corporate digital transformation and labor structure upgrading," International Review of Financial Analysis, Elsevier, vol. 90(C).
    16. Guy Michaels & Ashwini Natraj & John Van Reenen, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 years," NBER Working Papers 16138, National Bureau of Economic Research, Inc.
    17. Isphording Ingo E. & Zorn Dirk, 2024. "Bildungspolitik ist Arbeitsmarktpolitik," Wirtschaftsdienst, Sciendo, vol. 104(8), pages 524-526.
    18. Elizabeth J. Casabianca & Alessia Lo Turco & Claudia Pigini, 2019. "Import penetration and returns to tasks: recent evidence from the Peruvian labour market," Empirical Economics, Springer, vol. 56(2), pages 551-617, February.
    19. Zhang, Xinchun & Sun, Murong & Liu, Jianxu & Xu, Aijia, 2024. "The nexus between industrial robot and employment in China: The effects of technology substitution and technology creation," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    20. Xiaoyi Li & Qibo Tian, 2023. "How Does Usage of Robot Affect Corporate Carbon Emissions?—Evidence from China’s Manufacturing Sector," Sustainability, MDPI, vol. 15(2), pages 1-16, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:17:p:13170-:d:1231158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.