The Moderating Effect and Equity Enhancement Path of Income Distribution Policy in the Context of the Digital Economy

Zijun Wang

doi:10.71222/j5172y15

Authors

Zijun Wang New York University, New York, United States Author

DOI:

https://doi.org/10.71222/j5172y15

Keywords:

digital economy, income distribution, public policy, social equity, digital divide

Abstract

The rapid and pervasive development of the digital economy has fundamentally reshaped the traditional patterns of global income distribution. While technological progress and digital transformation have significantly improved overall production efficiency and created novel economic opportunities, they have simultaneously exacerbated distributional imbalances. These disparities primarily stem from the emergence of data monopolies, profound skill differentiation among the workforce, and the disproportionate wealth concentration driven by platform effects. This paper comprehensively analyzes the multidimensional mechanisms through which the digital economy influences income distribution dynamics. Specifically, it discusses the critical moderating effects of data rights confirmation and targeted skill training programs on primary distribution, emphasizing the need to empower workers in the digital age. Furthermore, it evaluates the role of digital taxation frameworks and robust social security mechanisms in optimizing secondary distribution. Additionally, the study proposes a strategic path to improve societal equity, which includes the systematic coordination of resource allocations and the comprehensive optimization of the overarching governance system. The research indicates that proactive institutional innovation is essential to balance data revenue sharing, effectively bridge the widening digital divide, and ultimately achieve a sustainable equilibrium between economic efficiency and social equity. By addressing these structural challenges, this study provides vital policy guidance for fostering inclusive development and ensuring that the dividends of the digital economy are shared more equitably across all segments of society.

References

1. P. Cui and K. Zhuang, "Digital economy and industrial structure transformation and income distribution," Applied Economics, vol. 57, no. 35, pp. 5215–5231, 2025.

2. A. Akaev, A. Rudskoi, and T. Devezas, "Digital economy and the models of income distribution in the society," in SHS Web of Conferences, vol. 44, p. 00005, 2018.

3. X. Xiong, W. He, and L. Li, "Digital economy, basic public services, and regional income gap," Journal of Social and Economic Development, pp. 1–29, 2025.

4. F. Wang and S. Shen, "Does the digital economy development improve or exacerbate income inequality? International evidence," Managerial and Decision Economics, vol. 45, no. 6, pp. 4012–4038, 2024.

5. H. Xia, H. Yu, S. Wang, and H. Yang, "Digital economy and the urban–rural income gap: Impact, mechanisms, and spatial heterogeneity," Journal of Innovation & Knowledge, vol. 9, no. 3, p. 100505, 2024.

6. D. Guellec and C. Paunov, "Digital innovation and the distribution of income," National Bureau of Economic Research, Working Paper No. w23987, 2017.

7. D. Coyle, The weightless world: strategies for managing the digital economy. MIT Press, 1999.

8. A. Agrawal, J. Horton, N. Lacetera, and E. Lyons, "Digitization and the contract labor market: A research agenda," in Economic analysis of the digital economy, pp. 219–250, 2015.

9. M. Olbert and C. Spengel, "International taxation in the digital economy: Challenge accepted?," SSRN, 2023.

10. J. Yan, X. Tu, and J. Zheng, "Does digital economy strengthen the income distribution effect of fiscal expenditure? Evidence from China," Plos One, vol. 18, no. 8, p. e0290041, 2023.

11. M. Wu, Y. Ma, Y. Gao, and Z. Ji, "The impact of digital economy on income inequality from the perspective of technological progress-biased transformation: Evidence from China," Empirical Economics, vol. 67, no. 2, pp. 567–607, 2024.

12. T. Scholz, Uberworked and underpaid: How workers are disrupting the digital economy. John Wiley & Sons, 2017.

13. Z. Xun, W. Guanghua, Z. Jiajia, and H. Zongyue, "Digital economy, financial inclusion and inclusive growth," China Economist, vol. 15, no. 3, pp. 92–105, 2020.

14. Z. Zhang, H. Xu, and Z. Qiao, "Has the Digital Economy Enhanced the Income Distribution Effect Among Industries? Evidence from China," Sustainability, vol. 16, no. 20, p. 8969, 2024.

15. A. Barata, "Strengthening national economic growth and equitable income through sharia digital economy in Indonesia," Journal of Islamic Monetary Economics and Finance, vol. 5, no. 1, pp. 145–168, 2019.

16. E. Brynjolfsson, A. Collis, W. E. Diewert, F. Eggers, and K. J. Fox, "GDP-B: Accounting for the value of new and free goods in the digital economy," National Bureau of Economic Research, Working Paper No. w25695, 2019.

17. K. Barefoot, D. Curtis, W. Jolliff, J. R. Nicholson, and R. Omohundro, "Defining and measuring the digital economy," US Department of Commerce Bureau of Economic Analysis, Washington, DC, vol. 15, no. 2, 2018.

18. Z. Peng and T. Dan, "Digital dividend or digital divide? Digital economy and urban-rural income inequality in China," Telecommunications Policy, vol. 47, no. 9, p. 102616, 2023.