Regional income inequality in Ukraine: The impact of Internet and mobile access on disposable income

Анотація

The effect of digitalization on inequality continues to spark discussions, with opinions divided on whether it alleviates or exacerbates the issue. This paper explores how digitalization has affected income inequality in Ukraine from 2017 to 2021. A pooled OLS model is used to investigate the relationship between mobile communication access and fixed Internet access and usage and their influence on disposable income levels. The findings reveal that mobile and Internet access significantly impact income distribution, with a notable disparity between high- and low-income regions. Specifically, wealthier regions benefit more from mobile access, while low-income regions lag due to insufficient broadband infrastructure. These results underscore the need for targeted management strategies to reduce regional income inequality via digitalization in Ukraine. The transition from desktop internet to mobile connectivity is clear, as 4G and 4G+ networks have enough speed to substitute fixed Internet and have become the primary means of internet access in Ukraine, reflecting a global trend. This highlights the increasing significance of mobile Internet, especially in lower-income regions, as a practical alternative to fixed broadband. Hence, mobile networks can boost economic participation and reduce regional disposable income inequality. The study suggests that targeted investments in digital infrastructure can significantly contribute to regional economic development. AcknowledgmentThis paper is funded as part of the project “Financial tools for reducing economic inequality in Ukraine” research project (No. 0124U002254), conducted at the State Organization “Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine.”

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