Digital Divide of the Shattered “Iron Rice Bowl”: Economic Insecurity and ICT Access in China

Abstract

Although economic factors account for the digital divide, the effect of economic insecurity on information communication technology (ICT) access has not been determined. The market-oriented reform of Chinese state-owned enterprises in the 1990s resulted in massive layoffs, encouraging us to investigate the relationship between economic insecurity and the digital divide. We draw on data from the China Health and Retirement Longitudinal Study (CHARLS). To handle the endogeneity related to economic insecurity, we use experience in a management position and the number of siblings as instruments for economic insecurity. With the introduction of these two instrumental variables, we find a negative relationship between economic insecurity and ICT access. This study provides insight into ICT policies involving underprivileged people in developing countries.