How the Digital Economy Shapes Workers’ Employment Choices: Internal Mechanisms and Empirical Evidence on Informal Employment

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Yunshan Xie
School of International Business, Tianjin Foreign Studies University, Tianjin, China

DOI: https://doi.org/10.70267/fer.250302.8597

Keywords

digital economy, informal employment, internet use

Abstract

Using data from the Chinese General Social Survey (CGSS) from 2017 to 2023, this study employs a Probit model to examine the impact of digital economy development on informal employment among the labor force. The results indicate that the development of the digital economy significantly increases the probability of engaging in informal employment. Mechanism analysis shows that the digital economy improves individuals’ internet usage, which in turn enhances human capital, reduces information barriers and transaction costs in the labor market, and ultimately raises the likelihood of informal employment. Heterogeneity analysis further reveals that the employment effects of the digital economy are not universally inclusive: the impacts are more pronounced among individuals with non-agricultural household registration, higher educational attainment, and the self-employed. Moreover, regions with higher levels of economic development benefit more from the promotion effect of the digital economy on informal employment.

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Published
Apr 15, 2026
Issue
Vol. 3 No. 2 (2026)
Section
Research Articles
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How to Cite

Yunshan Xie. (2026). How the Digital Economy Shapes Workers’ Employment Choices: Internal Mechanisms and Empirical Evidence on Informal Employment. Financial Economics Research, 3(2), 85-97. https://doi.org/10.70267/fer.250302.8597