Research on the Impact of Digital Empowerment on China’s Human Capital Accumulation and Human Capital Gap between Urban and Rural Areas

Abstract

Human capital is a key factor in the economic growth and sustainable development of a country. However, the impact of digitalization on human capital accumulation and the urban-rural human capital gap in China is seldom a focus in the literature. This paper establishes a three-sector economic growth model surrounding knowledge accumulation, endogenous technology, and labor mobility. It is designed to theoretically explain the influence of digital empowerment on human capital accumulation and its urban-rural gap in an economy. An empirical test is also conducted using CFPS panel data for 25 Chinese provinces from 2016 to 2018. The results show that: Firstly, digital empowerment significantly promotes the accumulation of human capital in rural and urban areas. The number of years of education increases by 1.37% in rural areas and 3.07% in urban areas for each index point of digitalization increase. Secondly, the impact of digitalization on the human capital gap between urban and rural areas demonstrates an inverted U-shaped curve. However, it is still within the Matthew Effect that the human capital gap between urban and rural areas is widening in tandem with digital development. Finally, the Matthew Effect in digitalization on the urban-rural human capital gap is relatively larger in the female group, higher education population, and larger family size.

Digitalization in the Human Capital Management

“…The introduction of digital technologies contributes to increasing the competitiveness, performance, and value of enterprises, but also gross domestic product [104,[109][110][111]. In the paper, we state that digitization requires investing in employee training our opinion is also confirmed by Sun et al (2023) [112], who claim that it is the use of digital technologies that supports a higher level of education for people in the country. In addition to positive changes, digitization also brings negatives and threats to businesses.…”

Mechanisms of the effect of fertility policies on the labor-capital income gap

“…Physical capital affects the relative income gap through skills [28]. As the dominant role of technology in production increases, physical capital is increasingly dependent on labor force skills [29][30][31][32][33]. The main manifestation of this is the continuous accumulation of physical capital and the differentiation of labor with different skills [34], the materialization of technological progress is prominent, and the complementarity of "capital-skill" is obvious [35,36].…”

Performance and sustainability evaluation of rural digitalization and its driving mechanism: evidence from Hunan province of China

“…The elderly is generally lower than the young in acceptance and adoption of digital products and services, so the impact of population aging is more important in the age structure (Arroyo-Menendez, 2022). Most digital products and services involve some emerging technology, and illiteracy is a key indicator affecting the matching between rural digitalization and population knowledge structure (Sun, 2023). Rural digitization is a core element of new urbanization construction and holds the same position as smart cities, so the impact of urbanization cannot be underestimated.…”