Does digital literacy reduce the risk of returning to poverty? Evidence from China

Abstract

Abstract China's use of digital technology for poverty alleviation has yielded substantial results. In establishing and improving long-term mechanisms for poverty eradication governance, changing capabilities is the key and ultimate goal in alleviating the problem of poverty. In the context of the widespread adoption of digital technology and rapid development of the digital economy, the lack of digital literacy is a significant obstacle that hinders rural residents from reaping the benefits of the digital economy. However, few studies explore the specific impact of improving digital literacy on poverty alleviation governance. Based on data from the China Family Panel Studies from 2018, this paper explores the impact of digital literacy on the risk of impoverished households returning to poverty, and examines the underlying mechanism. The study finds that digital literacy can reduce the risk of impoverished households returning to poverty in China by promoting family entrepreneurship, improving entrepreneurial performance, and expanding entrepreneurial scale. Further analysis shows that this effect varies among households with different regional and capital endowments, and that digital business literacy has the most significant effect in terms of alleviating the risk of returning to poverty. This study has significant implications for understanding and improving the governance mechanism of sustainable poverty alleviation through digital literacy. JEL codes: D13, I25, I32, O15, O33