Digital inequality: modernization of Kuznets curve in the digital era

Abstract

Objective: to study the impact of the level of broadband Internet access on income inequality in Russian regions.Methods: econometric modeling using the method of analyzing the relationship between inequality and economic growth, developed by Simon Kuznets, for a sample of 82 Russian regions in 2010–2020.Results: the paper examines the theoretical and practical aspects of income inequality of the population. The basis of many scientific studies is the results obtained by S. Kuznets, repeatedly tested in subsequent works. It is determined that under digital economy, inequality in economic development is also manifested in the spread of broadband Internet access. However, previous studies have not answered whether the further spread of the Internet will lead to increased income inequality. The authors of the study put forward and tested the corresponding hypothesis. Based on the analysis results, the authors draw conclusions about the existence of a nonlinear relationship between economic growth and income inequality, as well as the existence of a link between the spread of broadband Internet access and the reduction of income inequality in the Russian regions. At the same time, the results show that the relationship between the development of broadband Internet access and the Gini coefficient has an inverted U-shaped curve. This relationship is a development or analogue of the Kuznets curve, in which the development of digital infrastructure becomes one of the key factors in reducing inequality.Scientific novelty: a method for analyzing the relationship between income inequality and digital development is proposed, which is based on the results of econometric modeling. A model is substantiated and constructed that characterizes the impact of broadband Internet access on income inequality in Russia.Practical significance: the study results substantiate the need to increase the level of broadband Internet connectivity as one of the indicators of reducing income inequality in the Russian regions and, thus, indicate the directions of regional policy in the field of digital infrastructure development.