Can digital literacy improve income mobility? Evidence from China

Digital literacy represents a new form of human capital in the digital age. Investigating the role of digital literacy in facilitating upward income mobility for households is crucial for enhancing income mobility and advancing social equity. This paper empirically investigates the effects and mechanisms of digital literacy on income mobility, utilizing data from the China Household Finance Survey (CHFS). The paper reveals that digital literacy enhances upward income mobility for households by facilitating non-farm employment, entrepreneurship, and engagement in financial markets. Further analysis reveals that digital literacy is more conducive to upward income mobility for households with low physical, human, and social capital. Finally, the two external environments of digital financial inclusion and e-commerce have moderating effects. The more advanced digital financial inclusion and e-commerce, the more significant the contribution of digital literacy to upward household income mobility. This study offers new approaches for promoting household income mobility and maintaining social stability in the digital age.