Analyzing the effect of digital financial inclusion on urban private sector employment in China

Lately, digital financial inclusion has rapidly developed in China. However, the question posed concerns the role of digital financial inclusion in alleviating the longstanding financial repression in China’s financial system to promote urban private sector employment. This study considered panel data from 271 cities in China during 2011–2019 to empirically explore the relation between digital financial inclusion and urban private sector employment. The analysis results suggest that digital financial inclusion significantly promotes urban private sector employment. Moreover, the relation between digital financial inclusion and urban private sector employment is positively correlated with urban industrial structure. This study provides supporting evidence for the theory that financial development boosts employment. In conclusion, digital financial inclusion can increase urban private sector employment by alleviating longstanding financial repression in the private sector.