The impact of internet usage preferences on labor income: Evidence from China

by Kefeng Yuan, Xiaoxia Zhang

The widespread application and iterative updating of computers and Internet communication technologies have not only increased productivity and enhanced intra- and inter-enterprise collaboration, but have also led to significant changes in the labor market and residents’ labor income. In the digital era, accepting digital technology and possessing a certain degree of digital literacy have become the necessary abilities for people to survive and develop. However, the differences in digital literacy caused by individual differences will inevitably bring about a series of chain reactions. Therefore, it is necessary to study the subtle impact of Internet usage preference on residents’ labor income in the context of digital transformation to promote digital equity.

This study aims to empirically analyze micro-level survey data to reveal the impact of individual differences in internet usage preferences on their labor income. The findings provide theoretical references for government policy formulation and individual development.

A function model was established to analyze the impact of individual internet usage preferences on labor income. Relevant data from the authoritative Chinese General Social Survey (CGSS2017) were selected, and empirical analyses for significance, heterogeneity, and robustness were conducted using the ZINB and CMP models in the Stata statistical software.

(1) Higher Internet Usage Frequency (IUF) increases the likelihood of higher income. (2) Engaging in Online Social Networking (OSN) helps in accumulating social capital, leading to higher labor income. Meanwhile, participating in Online Entertainment (OE) relieves work and life stresses, thereby increasing labor income. Proficiency in Accessing Online Information (AOI) is associated with higher labor income, while frequent involvement in Online Business (OB) is correlated with higher personal income. Additionally, the Marginal utility of these internet usage preferences indicate that OB > AOI > OSN > OE. (3) Individual variations in physical, psychological, and social characteristics significantly influence the labor income effects of internet usage preferences. (4) There are substantial differences in the labor income effects of internet usage preferences between urban and rural areas and across different regions. (5) Education attainment has a positive mediating effect on the labour income effect of individual Internet use preferences, and enhancing residents’ digital literacy has a positive effect on increasing their labour income and alleviating inequality in digital gains. (6) The popularity of Internet technology is the background that triggers an individual’s Internet use, and the acceptance of a particular Internet technology is catalyzed by an individual’s perception of the value and difficulty of mastering that technology; an individual’s biased learning or proficiency in a particular Internet technology in order to gain higher competitiveness and value in the labour market is an important internal driving force.