Internet Affects Income Inequality of Residents: An Empirical Analysis Based on CFPS Data

Based on individual relative deprivation theory and using data from the China Family Panel Studies (CFPS)2018, we examine the impact of Internet use on residents' income inequality from a micro-individual perspective. The conclusion is that Internet use reduces residents' income inequality, and the results stay robust after endogeneity. Further research finds that Internet access produces a more significant suppression of income inequality for the medium-education and rural household group of residents compared to the low-education and high-education groups. The analysis of the impact mechanism shows that the Internet can impact individual income inequality by influencing residents' personal risk preferences and education levels. Therefore, we suggest improving the Internet infrastructure, accelerating the penetration and integration of the Internet with various industries, and promoting healthy economic development with the income gap reduction effect of the Internet.