A Study Of The Impact Of Digital Inclusive Finance On Internal Rural Income Inequality

In recent years,the continuous development of Internet technology has brought new opportunities for financial services innovation.A new generation of digital information technology,such as cloud computing,big data,blockchain,and artificial intelligence,is driving changes in financial services.The emergence of these technologies has made financial services more efficient and convenient,and has expanded the scope of services.The integration of finance and big data analysis technology has driven deep changes in the field and form of financial services,fully demonstrating the characteristics of digital finance such as convenience and low cost,and improving the accessibility of financial services.The successive implementation of policy plans such as "Broadband China","Telecommunications Universal Service" and "Digital Countryside" has effectively improved the level of information infrastructure construction in rural areas of China,and rural residents’ digital access has been significantly improved.Digital access has been significantly improved,and digital inclusive finance has also ushered in unprecedented development opportunities in rural areas.Income inequality has always been a key concern in China’s economic development.Since the reform and opening up,the income gap among Chinese residents has been widening,and although the gap has narrowed in recent years,the narrowing is still not obvious enough.As the occupational differentiation of China’s farmers intensifies,there is also a large gap in income disparity within rural areas.In order to improve the problem of income inequality among rural residents,ensure the sustainable income increase of farmers in the low-income stratum,raise the income level of the population in less developed areas,and strictly prevent the population out of poverty from returning to poverty again,an in-depth analysis of the factors influencing income inequality within rural areas is needed.From the perspective of intra-rural household income disparity,this paper constructs an analytical framework of digital inclusive finance on intra-rural household income inequality based on inclusive growth theory,financial exclusion theory,and financial development theory,and combines micro data of rural households from the China Household Tracking Survey(CFPS)for2014,2016,and 2018,using the Kakwani relative deprivation index and panel fixed effects model to analyze the impact of digital inclusive finance development on rural intra-household income inequality.The main conclusions of this paper are as follows:(1)Digital inclusive finance can significantly alleviate the income inequality of rural area residents,and this result remains significant when endogeneity is considered.(2)In the three dimensions of digital inclusive finance,the breadth of coverage and the degree of digitalization are negatively related to the relative deprivation of rural households,i.e.,they can significantly alleviate the income inequality within rural areas,and the relief effect of the breadth of coverage is greater than that of the degree of digitalization,while the depth of use is also negatively related to income inequality,but not significantly.(3)In terms of impact mechanism,digital inclusion alleviates income inequality by alleviating credit constraints of rural residents,promoting entrepreneurial behavior of family members,and accumulating social capital.(4)In terms of heterogeneity,digital inclusive finance has a greater effect on alleviating income inequality for rural households in eastern regions than in central and western regions;digital inclusive finance has a greater effect on alleviating income inequality for risk-averse and risk-neutral household heads than for risk-seeking households.Based on the findings,this paper puts forward five policy recommendations:(1)The government needs to strengthen policy support for low-income groups in backward rural areas.(2)Targeted development of specific financial services for different audience groups in rural areas to continuously improve the depth of use of digital inclusive finance.(3)Continuously promote the construction as well as improvement of digital infrastructure,focusing on the digital divide of rural low-income households.(4)The synergistic effect of digital inclusive finance and education level should be brought into play to improve the financial literacy of rural residents.(5)To strengthen data security management and prevent the risk of user information leakage.The main contribution of this paper is to study the income inequality problem faced by the rural disadvantaged groups from the perspective of digital inclusive finance,and to provide a reference for the research on achieving income increase for the low-income population.Continued research on the inclusive characteristics of inclusive finance is not only beneficial to the innovation and improvement of financial services,but also can promote the economic and financial inclusion of society.Digital inclusive finance can break the development bottleneck of rural finance and promote the innovation and development of rural finance.