The Mechanism By Which Digital Inclusive Finance Affects Farmers’ Income

The report of the 19 th National Congress pointed out that China’s economic development will replace speed with quality.The criterion for evaluating high-quality and efficient economic development lies in whether it benefits all groups and whether the dividends of policies can be equally enjoyed.Finance plays a vital role in the economic field.At the same time,the Three Rural Issues are the top priority of the work of the whole party.As the main carrier of the Three Rural Issues,farmers play a vital role in the national policy of rural revitalization.Existing studies believe that digital Financial inclusion can significantly improve farmers’ income.As digital Financial inclusion can alleviate financial exclusiveness caused by information asymmetry,it is conducive to financial inclusion;It can reduce the uncertainty and risk in financial activities.Therefore,digital Financial inclusion can improve farmers’ income.However,due to the existence of the digital divide,the reality of a large income gap among farmers still exists.This paper proposes a study on the transmission mechanism of digital Financial inclusion affecting farmers’ income,aiming to clarify the channel and mechanism of digital Financial inclusion affecting farmers’ income from the perspective of farmers.This paper uses the survey data of the China Family Panel Studies from 2014 to 2018,the survey data of the China Household Finance Survey from 2013 to 2015,and the digital Financial inclusion index of Peking University from 2011 to 2020 to conduct empirical research by using a large number of econometric methods such as fixed effect regression and Instrumental variables estimation regression.The main research contents are as follows:First,the two-stage least square method,Instrumental variables estimation model and Oaxaca Blinder decomposition method are used to conduct an empirical analysis on the impact of digital Financial inclusion on farmers’ income.The research finds that digital Financial inclusion has a significant role in promoting income growth and narrowing the income gap of middle-income groups,but the development of digital Financial inclusion will expand the income gap between high-income groups and low-income groups to a certain extent.Secondly,we use the regulatory effect model,network probability unit model and re centralization model,and introduce rural traditional finance to make an empirical analysis of the impact of digital Financial inclusion on the first mechanism employment choice.The research shows that digital Financial inclusion has a significant role in promoting non-agricultural employment choices,while rural traditional finance has not significantly promoted non-agricultural employment choices.Finally,the panel fixed effect model,the generalized least squares method and the multiple interaction model are used to empirically analyze the land circulation of the second mechanism of digital Financial inclusion.The research shows that digital Financial inclusion has expanded the decision-making gap of land transfer behavior.In the agricultural sector,financial exclusion still exists in the financial sector,and financial exclusion has expanded the decision-making gap of land transfer and the irrationality of production and operation decisions.This paper finds that(1)digital Financial inclusion can alleviate financial exclusivity,but still cannot solve the problem of widening income gap;(2)Digital Financial inclusion has a significant role in promoting non-agricultural employment;(3)Digital Financial inclusion has widened the decision-making gap of land leasing behavior.Based on the research findings,the main policies proposed in this paper include:(1)We should increase policy support for digital Financial inclusion,optimize resource allocation and incentive mechanism;(2)To increase support for the central and western regions and low-income groups,and narrow regional and income disparities;(3)We should optimize the spatial layout of digital Financial inclusion,resolve regional differences,and promote employment equity;(4)Promote the marketization and standardization of land transfer,and provide convenient land transfer services for farmers.