The Impact Of Digital Financial Inclusion On Urban-Rural Income Gap

Since the reform and opening up,China’s rural economy has developed rapidly,but compared to urban areas,the per capita income growth rate of rural residents is still relatively low,and the income gap between urban and rural areas is still large.This situation is an important factor that hinders the uneven development of China’s economy.With the emergence of digital technology and the rise of digital inclusive finance,a new perspective has been provided to effectively narrow the urban-rural income gap.Digital finance expands its dissemination through e-commerce and social networks,providing information technology financial services on the basis of achieving wide coverage.The bottom-up service approach allows it to reach customer groups that were previously excluded by traditional finance,thus possessing a naturally inclusive nature.Digital inclusive finance mainly targets low-income vulnerable groups excluded by traditional finance,including farmers.Therefore,reducing the urban-rural income gap is the main goal of digital inclusive finance.In that case,this article will discuss the impact of the development of digital inclusive finance on the urban-rural income gap.Firstly,organize relevant literature from domestic and foreign scholars on the factors of urban-rural income gap;Analyze the relevant theories and current situation of urban-rural income gap;Analyze the mechanism and related impact of digital economy on the income of urban and rural residents,and propose hypothesis analysis based on this.Secondly,conduct empirical research on the proposed hypothesis;From the perspective of internet financial services,the Taier index of 31 provinces,cities,and autonomous regions in China was obtained as the explanatory variable to measure the urban-rural income gap.Then,the changes in urban-rural income gap with the development of inclusive finance and digital inclusive finance were compared and analyzed at the national and regional levels.Then,the digital inclusive finance index was transformed into its sub dimension index for empirical regression analysis.Finally,it was found that from a national perspective,inclusive finance has little effect on narrowing the urban-rural income gap,while the development of digital inclusive finance has a significant effect on narrowing the urban-rural income gap;From a regional perspective,inclusive finance only has a strong convergence effect on narrowing the urban-rural income gap in the central region,and the effect is not significant in the eastern and western regions.However,the development of digital inclusive finance can suppress the urban-rural income gap in the eastern,central,and western regions,but the impact varies in magnitude and there are regional heterogeneity differences;From a multidimensional perspective,the development of inclusive finance will not narrow the urban-rural income gap.The three different dimensional indicators that constitute digital inclusive finance have shown certain convergence effects on the urban-rural income gap,with coverage breadth convergence being the most significant,followed by depth of use,and finally the degree of digitization.