The impact and heterogeneity analysis of digital financial inclusion on non-farm employment of rural labor

This study examines the effects of digital financial inclusion on non-farm employment of rural labor and the mediating mechanism of innovation and entrepreneurship activity using China Family Panel Studies (CFPS) and the provincial index of digital financial inclusion. Through the empirical test of the Probit model and mediation effect model, we found that: firstly, digital financial inclusion can promote non-farm employment of rural labor, with the level of digitalization having the most significant impact; secondly, by encouraging innovation and entrepreneurial activity, digital financial inclusion can promote non-farm employment of rural labor; thirdly, the driving effect of digital financial inclusion on non-farm employment of rural labor is more pronounced among the unmarried, eastern region, and male labor. Therefore, we should improve the construction of rural digital infrastructure and accelerate the development of inclusive rural finance to promote more diversified non-farm employment options for “disadvantaged groups”; encourage and support innovation at the government level, and create a favorable atmosphere for innovation and entrepreneurship. Simultaneously, farmers’ digital literacy and financial knowledge should be improved so that more can adopt and take advantage of digital financial inclusion.