Can Digital Financial Inclusion Promote the Sustainable Growth of Farmers’ Income?—An Empirical Analysis Based on Panel Data from 30 Provinces in China

The issue of farmers’ income is a widespread concern in countries worldwide, and the Chinese government has always prioritized promoting the sustainable growth of farmers’ income. The development of digital financial inclusion provides a new opportunity for farmers’ income to achieve sustainable growth. With the implementation of digital financial inclusion, whether it can effectively promote farmers’ income growth deserves in-depth study. Based on the panel data from 30 provinces in China from 2011 to 2021, this study uses a dual fixed effects model to empirically analyse the impact of digital inclusive finance on farmers’ income and further analyses the impact of various dimensions of digital financial inclusion on farmers’ income. From a policy perspective, the DID (difference in differences) method is used to analyse, in general, the impact of the implementation of digital financial inclusion policies on farmers’ income and, in particular, the impact of such inclusion on farmers’ income from the perspective of income structure. The results of this study show that digital financial inclusion can significantly promote farmers’ income growth. The dimensions of the breadth of coverage and depth of use can significantly contribute to the increase in farmers’ income, whereas digitization has a negative effect on this increase. Furthermore, the DID results show that digital financial inclusion policy implementation has a significantly positive effect on farmers’ income growth, that is, it can significantly contribute to their wage income, can contribute to family operating income but at a low level of significance, and does not significantly contribute to their property income. Moreover, regional heterogeneity analysis demonstrates that the marginal contribution of digital financial inclusion to the growth of farmers’ income in the eastern region is less than that in the central and western regions. Therefore, the development of digital inclusive finance in rural areas should be vigorously promoted in order to provide high-quality financial services and achieve sustainable growth in farmers’ incomes.