Examining the Impact of Digital Divide on Rural Multidimensional Poverty: Evidence From China

ABSTRACT Although China has eradicated extreme income poverty, rural households continue to experience persistent multidimensional deprivation, which may be exacerbated by the widening digital divide. This study conducts an empirical analysis of the impact of the digital divide on multidimensional poverty in rural China and its potential transmission pathways. Using data from the 2016 and 2018 waves of the China Family Panel Studies (CFPS), this study constructs a household‐level Digital Divide Index via principal component analysis and develops a customized Multidimensional Poverty Index using an income‐adjusted Alkire–Foster method. Probit regression models are employed to examine the impact of the digital divide on rural multidimensional poverty and its transmission mechanisms. The results show that the digital divide significantly increases the likelihood of multidimensional poverty in rural areas, with heterogeneous effects depending on internet usage purposes and access modes, as well as across regions and age groups of household heads. Further analysis reveals that the digital divide operates mainly by constraining non‐agricultural employment, weakening social networks, and reducing access to credit. These findings deepen the understanding of the socio‐economic consequences of digital inequality and provide empirical evidence and actionable policy implications for promoting digital inclusion and poverty reduction in developing countries.