In the widespread adoption of the Internet and the rapid development of digital technology, the importance of data elements has become increasingly prominent. However, the heterogeneous diffusion of digital technology has also objectively formed a digital divide, which not only makes it difficult for the digitally “vulnerable” groups to enjoy the dividends brought by rapid digital development, but also causes substantial inequality at the region, industry, enterprise, and individual levels. So, how does the digital divide affect wealth inequality? What is its internal mechanism? How to effectively narrow the digital divide, thereby alleviating wealth inequality and promoting common prosperity? This paper aims to discuss these issues.

This paper models the usage gap (the second generation) and the knowledge gap (the third generation), embeds them into the classic Aiyagari-Bewley-Huggett model, and constructs a HANK model that includes the two-generation digital divide and information inclusive policies. It systematically analyzes the mechanism of how the usage gap and the knowledge gap affect wealth inequality, and quantitatively estimates the effectiveness of information inclusive policies in reducing wealth inequality. The results show that: (1) An asymmetric relationship can be found between the usage gap and various Gini coefficients. When the usage gap gradually narrows, the wealth and capital income Gini coefficients first increase and then decrease, while the income Gini coefficient decreases. (2) There is a non-linear relationship between the knowledge gap and various Gini coefficients. When the knowledge gap gradually narrows and converges towards the “dominant party”, the wealth, capital income, and income Gini coefficients all first rise and then fall; when the knowledge gap gradually narrows and converges towards the “disadvantaged party”, the wealth, capital income, and income Gini coefficients all gradually increase and then remain stable. (3) Information inclusive policies can reduce the three Gini coefficients.

The marginal contributions of this paper are as follows: First, under the framework of an expanded HANK model, the important forms of the digital divide are accurately characterized. Based on this, the specific impact of usage gap and knowledge gap on household consumption, savings behavior, and wealth inequality is deeply analyzed from a quantitative analysis perspective. Second, it incorporates information inclusive policies into the HANK model and accurately estimates the direct impact of the policies on wealth inequality, as well as the effectiveness of the policies in reducing wealth inequality.