IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v28y2024i3p984-1004.html
   My bibliography  Save this article

Income inequality among peers in China: Does internet penetration have a role?

Author

Listed:
  • Yulin Liu
  • Xiaomei Li
  • Xin Fang

Abstract

In the Internet age, income inequality within peer groups has raised attention. We examine the effect of Internet penetration on peer income inequality and investigate whether the Internet penetration and peer income inequality relationship can be reinforced by human capital. Using a combination of macro and microdatabases of China over the period 2010–2018, we find that peer income inequality in China generally follows a downward trend from 2010. In addition, we show that Internet penetration significantly reduces peer income inequality. Internet penetration has a negative effect on peer income inequality among those under 40 years old, while the effect is reversed among those aged 40–60. Furthermore, human capital can reinforce the links between Internet penetration and peer income inequality. Our results confirm that a mixed indicator of Internet penetration and human capital investment should be part of an active economic policy aimed at reducing peer income inequality.

Suggested Citation

  • Yulin Liu & Xiaomei Li & Xin Fang, 2024. "Income inequality among peers in China: Does internet penetration have a role?," Review of Development Economics, Wiley Blackwell, vol. 28(3), pages 984-1004, August.
    • Handle: RePEc:bla:rdevec:v:28:y:2024:i:3:p:984-1004
    DOI: 10.1111/rode.13090
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/rode.13090
    Download Restriction: no
    File URL: https://libkey.io/10.1111/rode.13090?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Steven Si & Xuebao Yu & Aiqi Wu & Shouming Chen & Song Chen & Yiyi Su, 2015. "Entrepreneurship and poverty reduction: A case study of Yiwu, China," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 119-143, March.
    2. Antonelli, Cristiano & Gehringer, Agnieszka, 2017. "Technological change, rent and income inequalities: A Schumpeterian approach," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 85-98.
    3. Ada Ferrer-i-Carbonell & Xavier Ramos, 2014. "Inequality And Happiness," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 1016-1027, December.
    4. Noh, Yong-Hwan & Yoo, Kyeongwon, 2008. "Internet, inequality and growth," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1005-1016.
    5. Alan B. Krueger, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984–1989," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 33-60.
    6. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January.
    7. Simplice A. Asongu & Jacinta C. Nwachukwu & Chris Pyke, 2019. "The Comparative Economics of ICT, Environmental Degradation and Inclusive Human Development in Sub-Saharan Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1271-1297, June.
    8. Thomas Lemieux, 2006. "Postsecondary Education and Increasing Wage Inequality," American Economic Review, American Economic Association, vol. 96(2), pages 195-199, May.
    9. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    10. Bauer, Johannes M., 2018. "The Internet and income inequality: Socio-economic challenges in a hyperconnected society," Telecommunications Policy, Elsevier, vol. 42(4), pages 333-343.
    11. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    12. Peter Kuhn & Hani Mansour, 2014. "Is Internet Job Search Still Ineffective?," Economic Journal, Royal Economic Society, vol. 124(581), pages 1213-1233, December.
    13. Xu Xu & Alison Watts & Markum Reed, 2019. "Does access to internet promote innovation? A look at the U.S. broadband industry," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1423-1440, December.
    14. Ingvild Almås & Tarjei Havnes & Magne Mogstad, 2011. "Baby booming inequality? Demographic change and earnings inequality in Norway, 1967–2000," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 629-650, December.
    15. Hjalmarsson, Simon & Mood, Carina, 2015. "Do poorer youth have fewer friends? The role of household and child economic resources in adolescent school-class friendships," Children and Youth Services Review, Elsevier, vol. 57(C), pages 201-211.
    16. Storesletten, Kjetil & Telmer, Christopher I. & Yaron, Amir, 2004. "Consumption and risk sharing over the life cycle," Journal of Monetary Economics, Elsevier, vol. 51(3), pages 609-633, April.
    17. Bernard, Andrew B & Jones, Charles I, 1996. "Technology and Convergence," Economic Journal, Royal Economic Society, vol. 106(437), pages 1037-1044, July.
    18. Juan Lin & Zhou Yu & Yehua Dennis Wei & Mingfeng Wang, 2017. "Internet Access, Spillover and Regional Development in China," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    19. Paglin, Morton, 1975. "The Measurement and Trend of Inequality: A Basic Revision," American Economic Review, American Economic Association, vol. 65(4), pages 598-609, September.
    20. Moses Mwenda Muthinja & Chimwemwe Chipeta, 2018. "What Drives Financial Innovations in Kenya’s Commercial Banks? An Empirical Study on Firm and Macro-Level Drivers of Branchless Banking," Journal of African Business, Taylor & Francis Journals, vol. 19(3), pages 385-408, July.
    21. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-575, February.
    22. Wertz, Kenneth L, 1979. "The Measurement of Inequality: Comment," American Economic Review, American Economic Association, vol. 69(4), pages 670-672, September.
    23. Njangang, Henri & Beleck, Alim & Tadadjeu, Sosson & Kamguia, Brice, 2022. "Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis," Telecommunications Policy, Elsevier, vol. 46(2).
    24. Hidalgo, Antonio & Gabaly, Samuel & Morales-Alonso, Gustavo & Urueña, Alberto, 2020. "The digital divide in light of sustainable development: An approach through advanced machine learning techniques," Technological Forecasting and Social Change, Elsevier, vol. 150(C).
    25. Bai, Yang, 2017. "The faster, the better? The impact of internet speed on employment," Information Economics and Policy, Elsevier, vol. 40(C), pages 21-25.
    26. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    27. Wanglin Ma & Peng Nie & Pei Zhang & Alan Renwick, 2020. "Impact of Internet use on economic well‐being of rural households: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 24(2), pages 503-523, May.
    28. Robert E. Litan & Alice M. Rivlin, 2001. "Projecting the Economic Impact of the Internet," American Economic Review, American Economic Association, vol. 91(2), pages 313-317, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu, Binbin, 2022. "The Impact of the Internet on Industrial Green Productivity: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    2. Jian Zhu & Zifang Li & Hui Wang, 2023. "Internet Development and Urban–Rural Consumption Inequality: Evidence from Chinese Cities," Sustainability, MDPI, vol. 15(12), pages 1-15, June.
    3. Simplice A. Asongu, 2021. "The Effects of Mobile Phone Technology, Knowledge Creation and Diffusion on Inclusive Human Development in Sub-Saharan Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(3), pages 1367-1398, September.
    4. Ingvild Almås & Magne Mogstad, 2009. "Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries," Discussion Papers 583, Statistics Norway, Research Department.
    5. Simplice Asongu & Nicholas M. Odhiambo, 2023. "Enhancing ICT for female economic participation in sub-Saharan Africa," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 15(2), pages 195-223, May.
    6. Frank Cowell & Emmanuel Flachaire & Sanghamitra Bandyopadhyay, 2013. "Reference distributions and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 421-437, December.
    7. Liu, Yajie & Cui, Lijuan & Xiong, Yanyan & Yao, Xianguo, 2023. "Does the development of the Internet improve the allocative efficiency of production factors? Evidence from surveys of Chinese manufacturing firms," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 161-174.
    8. Laura A. Harvey & Jochen O. Mierau & James Rockey, 2024. "Inequality in an Equal Society," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 86(4), pages 871-904, August.
    9. Asongu, Simplice A. & Orim, Stella-Maris I. & Nting, Rexon T., 2019. "Inequality, information technology and inclusive education in sub-Saharan Africa," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 380-389.
    10. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
    11. Ingvild Almås & Tarjei Havnes & Magne Mogstad, 2011. "Baby booming inequality? Demographic change and earnings inequality in Norway, 1967–2000," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 629-650, December.
    12. Ji, Jie & Wang, Ying, 2024. "The impact of digital infrastructure on the geographical supply chain layout of firms —— Evidence from Chinese microdata," China Economic Review, Elsevier, vol. 87(C).
    13. Ren, Jianyu & Xu, Zhitao & Hu, Mingzhi, 2023. "Digital economy and settlement intention of migrants in urban China," Telecommunications Policy, Elsevier, vol. 47(10).
    14. John Creedy, 1991. "Lifetime Earnings and Inequality," The Economic Record, The Economic Society of Australia, vol. 67(1), pages 46-58, March.
    15. von Weizsacker, Robert K., 1996. "Distributive implications of an aging society," European Economic Review, Elsevier, vol. 40(3-5), pages 729-746, April.
    16. Asongu, Simplice A. & Rahman, Mushfiqur & Nnanna, Joseph & Haffar, Mohamed, 2020. "Enhancing information technology for value added across economic sectors in Sub-Saharan Africa✰," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    17. Ingvild Almås & Magne Mogstad, 2009. "Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries," Discussion Papers 583, Statistics Norway, Research Department.
    18. Greg Kaplan, 2012. "Inequality and the life cycle," Quantitative Economics, Econometric Society, vol. 3(3), pages 471-525, November.
    19. Barth, Erling & Davis, James C. & Freeman, Richard B. & McElheran, Kristina, 2023. "Twisting the demand curve: Digitalization and the older workforce," Journal of Econometrics, Elsevier, vol. 233(2), pages 443-467.
    20. Thanos Fragkandreas, 2022. "Three Decades of Research on Innovation and Inequality: Causal Scenarios, Explanatory Factors, and Suggestions," Working Papers 60, Birkbeck Centre for Innovation Management Research, revised Feb 2022.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:28:y:2024:i:3:p:984-1004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.