Can farmers’ digital literacy improve income? Empirical evidence from China

Abstract

This paper explore the impacts and mechanisms of digital literacy of farm households on income. The baseline regression of the impact of digital literacy of farm households on household income uses a fixed effects regression model, and the 2SLS regression model is used to address the endogeneity problem present in the model. The findings reveal that improving digital literacy among rural households significantly increases their family income, a result that remains robust even after considering endogeneity issues. Further examination of the mechanisms shows that enhancing digital literacy among rural households significantly improves their information acquisition capabilities and cognitive skills. It also deepens financial services, boosting the usage and engagement of rural households in digital financial activities, thereby enhancing family income levels. Facilitating rural residents’ access to digital skills and tools to ride the digital economic wave, ensuring fair access, and achieving sustainable family income are of paramount significance for rural revitalization. It is also a crucial step in bridging the digital divide and promoting shared prosperity.