Effect of Internet usage on nonfarm employment participation and quality: Evidence from China

Abstract

Nonfarm employment is an important livelihood strategy for rural residents. How to improve the quality of nonfarm employment is currently an urgent problem to be solved, which is not only related to the well-being of individuals but also linked to the healthy development of the economy. Data from the China Family Panel Studies (CFPS) are used to analyze the role of Internet usage in promoting nonfarm employment participation and quality. The inverse-probability-weighted regression adjustment is employed as the baseline model, while the Heckman selection model is utilized to address sample selection bias, and the control function approach is applied to tackle endogeneity. The results indicate that Internet usage has a positive effect on rural workforce’s participation in nonfarm employment, particularly in nonfarm wage employment and local nonfarm employment. From a dimensional perspective, Internet usage can enhance the quality of nonfarm wage employment in terms of wages, cash benefits, employment stability, and the socioeconomic status of occupations. The positive effect of Internet usage on the index of nonfarm wage employment quality constructed by the principal component analysis is insignificant. Subgroup analysis reveals that the effect of Internet usage on the quality of nonfarm wage employment differs across age groups, educational levels, regional topographies, and employment types. The research conclusions support the necessity of popularizing the Internet in rural areas. Furthermore, it must be noted that enhancing nonfarm employment quality requires efforts directed at digital skills.