Can rural digital economy mitigate local population outflow: Evidence from China

The development of the rural digital economy has significantly enhanced local competitiveness and reshaped migration patterns in China’s rural areas. Using LandScan data, we measured county-level population changes, and based on this, constructed a panel dataset for 1747 counties from 2011 to 2020. Based on the push-pull theory and the Harris-Todaro model, this paper applied a time-varying difference-in-differences (DID) method to assess the impact of the E-commerce into the Rural Comprehensive Demonstration Counties (ERCDC) policy on local population migration and explored its potential mechanisms. Our findings indicate that: (1) The ERCDC policy has effectively reduced rural population outflow in pilot areas. (2) A range of robustness tests, including spillover effect testing, instrumental variable methods, and PSM-DID, confirm the robustness of the baseline results. (3) The policy effects are more pronounced in regions where government support for the digital economy is strong, market proximity is closer, public attention to digitalization is high, and the convenience of freight transportation is greater. (4) The ERCDC policy has significantly enhanced ‘income pull’, ‘employment pull’, and ‘entrepreneurship pull’ in pilot areas by increasing local income, improving local employment opportunities, and stimulating local entrepreneurship, thereby mitigating population outflow in these areas. This paper highlights the effectiveness of the digital economy in addressing rural population outflow in China, thereby providing important policy implications for governments in developing countries to address rural population challenges.