Beyond Income Growth: Internet Use and Rural Household Income Quality in China

Abstract

This study examines the association between Internet use and multidimensional income quality among rural households in China. Using 14,707 household-year observations from the China Family Panel Studies (2014–2020), we construct an index covering income adequacy, structure, stability, acquisition costs, and knowledge intensity. Household and year fixed-effects estimates show that a one-standard-deviation increase in the share of adult household members using the Internet is associated with a 0.010-unit increase in the index, equivalent to 2.2% of its sample mean. The positive association persists across alternative weighting schemes but depends substantially on including the education-based knowledge dimension. Component-level results link Internet use to greater income adequacy, more diversified income sources, and higher knowledge intensity, alongside higher agricultural input costs and greater income variability. Descriptive channel decompositions yield indirect components corresponding to 40.1% of the total association for non-farm employment and 2.3% for social networks. The association is weaker among households with older heads. These conditional associations highlight the importance of assessing income-generating capabilities, production costs, and income stability alongside income growth when evaluating rural digitalization.