Short-Term Pain but Long-Term Gain: Urban Financial Digitization and Rural Migrants’ Living Quality in China

China’s urbanization has witnessed a significant influx of people pursuing better economic prospects. However, as digitization becomes increasingly integrated into urban living, it raises the bar for migrants’ digital literacy, and creates adaptation challenges for rural migrants. Despite a few pieces of literature having analyzed how micro-level economic and social characteristics of rural migrants affect their urban living quality in inflow areas, few studies have examined the influencing factors of migrants’ urban living quality from the perspective of digitization level of the inflow areas, which is a nonnegligible environmental factors in modern China. Based on the data of China Migrants Dynamic Survey (CMDS), this paper empirically examines how urban financial digitization in inflows affects rural migrants’ urban living quality. The impact of financial digitalization on urban living quality of rural migrants presents a significantly positive “U” shape. That is, with the improvement of financial digitalization, rural migrants’ urban living quality in inflow areas would first decline and then increase. The mechanism study shows that the financial digitization affects rural migrants’ living quality through urban settlement intention as intermediary variable. Furthermore, heterogeneity across education attainment, migration scope and duration were investigated. The results of the study provide empirical evidence on how to make rural migrants obtain better life experience with the development of urban digitization.