Does residents’ digital capability affect households’ financial health? Evidence from the CFPS

Purpose This study aims to examine the impact and mechanisms of residents’ digital capabilities on household financial health and determine whether their effect differs across different families. Design/methodology/approach Using the China Family Panel Studies Data and the fixed-effects model, this paper estimates how residents’ digital capabilities influence household financial health. Findings The study reveals that digital capabilities significantly improve household financial health through information welfare and livelihood diversification. Moderating effect analysis indicates that risk shocks activate the protective role of digital capability, mitigating adverse effects of risk shocks and enhancing household financial health. The heterogeneity analysis shows that the impact of digital capabilities is more pronounced among households with lower educational levels and those with middle-level financial literacy. Originality/value The paper constructs a household financial health index based on four dimensions, offering realistic support for achieving high-quality development of inclusive finance in China. It uncovers the intrinsic mechanisms through which digital capabilities affect household financial health, providing a theoretical foundation for the government to guide residents in the effective and rational use of digital technologies to improve household financial well-being.