New quality productive forces as a catalyst: moderating the impact of digital infrastructure on urban-rural income inequality in China

Abstract

Purpose Promoting sustainable economic development and preserving peace and security in the region depend on closing the disparity in urban and rural incomes. Digital infrastructure, unlike other types of infrastructure, is becoming a vital force that influences sustainable economic development. Design/methodology/approach This study employs a double machine learning model and a mediation and moderation effects model to investigate the impact mechanisms of digital infrastructure on urban-rural income inequality, in which new quality productive forces can play a moderating role. Findings The results shows that the construction of “Broadband China” demonstration cities contributed to an increase in urban income of about 8.3% and rural income by about 9.8%, narrowing the urban-rural income gap by about 0.04%. The increase in new quality productive forces reinforces the positive impact of Internet applications on income disparity. In addition, labor migration to non-farm employment is an essential way in which digital infrastructure acts on rural-urban inequality. It was further found that digital equipment leads to greater equality between urban and rural areas by facilitating labor transfer to non-agricultural industries. Originality/value This study innovatively incorporates the differential impact of new quality productive forces on urban-rural income inequality, thereby advancing our understanding of their role in income distribution. It leverages the “Broadband China” pilot policy as a quasi-natural experiment to strengthen causal inference. Employing the double machine learning (DML) method enhances estimation accuracy and robustness beyond traditional approaches. Mechanism analysis further identifies that digital infrastructure promotes income equality by facilitating labor transfer to non-agricultural sectors, offering deeper theoretical and practical insights.