Does digital literacy reduce the risk of returning to poverty? Evidence from China

Digital literacy is a crucial skill for accessing the benefits of the digital economy. Analyzing the impact of digital literacy on the risk of falling back into poverty is of great practical significance for achieving sustainable poverty alleviation. Based on data from the China Family Panel Studies (CFPS) in 2018, this paper examines the impact of digital literacy on the risk of returning to poverty for poverty-alleviated households, and investigates its underlying mechanism. The study finds that digital literacy can reduce the risk of returning to poverty by promoting local non-farm employment and migrant work, improving entrepreneurial performance, and expanding entrepreneurial scale. However, digital literacy plays a relatively minor role in reducing the risk of returning to poverty through entrepreneurship compared to employment. In the heterogeneity analysis, this paper concludes that digital literacy is more advantageous for disadvantaged groups. Furthermore, compared to digital entertainment literacy, digital learning literacy is more effective in reducing the risk of returning to poverty. This study has significant implications for understanding and improving the governance mechanism of sustainable poverty alleviation through digital literacy.