Digital Ability and Livelihood Diversification in Rural China

Livelihood diversification is an important strategy for rural households in developing countries, especially in China, which has the largest rural population in the world. In the current digital age, the existing literature lacks sufficient research on the influence of digital ability on livelihood diversification. Using survey data from 1914 rural households in China, this study evaluates the digital ability of rural households through item response theory. Additionally, the livelihood diversification of rural households is analyzed from two aspects: work type and industry. Finally, IV-Tobit models are set up to test the impact of digital ability on livelihood diversification. The results show that: (1) engaging in both agricultural production and employed work concurrently is the key strategy for rural households to diversify their livelihoods; (2) digital ability significantly promotes livelihood diversification, regarding both work type and industry; (3) digital ability's capacity to diversify livelihood is particularly notable for low-income households, followed by the medium-income group, then the high-income group. These findings are meaningful for the sustainable improvement of rural households' livelihoods.