The COVID-19 pandemic and deepening digital inequalities in China

Abstract

As Internet usage reshapes our societies, digital inequalities have increased over the past few decades. During the COVID-19 pandemic, many countries accelerated their digital transformation processes, and it is widely believed the COVID-19 pandemic has deepened existing inequalities in the digital realm. Yet, few studies have empirically examined whether digital inequalities in the labor market increased during the pandemic. This analysis studies how the COVID-19 pandemic affected Chinese workers' Internet usage and how this influence varied across socioeconomic groups. By using the ordered probit model and leveraging the most recent data from the China Family Panel Studies and the Johns Hopkins Coronavirus Resource Center, we find that the pandemic significantly increased the overall level of Internet usage in the country, and the mediating effects of the perceived importance of the Internet and access to the Internet are confirmed. As Internet usage increased, digital inequalities in China's labor market deepened, especially among young and wealthy workers with high social status in urban areas, while older and poorer workers in rural areas benefited less from this new ‘digital wave.’ Moreover, during the pandemic, Internet usage increased among employees working in state-owned enterprises (SOEs), which suggests a growing digital inequality gap between SOEs and other sectors. Following a series of robustness tests, our research findings remain valid. We propose a policy redesign that embodies a comprehensive long-term vision and guarantees raising the levels of Internet usage for socially and economically disadvantaged groups in China.