Abstract: Clarifying the mechanism by which the digital economy optimizes China’s industrial employment structure and affects the wage gap in industries can help to gain a deeper understanding and handling of the relationship between industrial structure and employment quality. Different from previous single dimensional studies, this study incorporates the digital economy, industry employment structure, and industry wage gap into the same framework. From the perspective of industry employment structure bias, it empirically tests the causal relationship, mechanism of action, and spillover effects between the digital economy and industry wage gap. The research results found that the development of the digital economy has a significant positive effect on narrowing the industry wage gap. Further testing of the mechanism of action indicates that the digital economy can narrow the industry wage gap by correcting the deviation in the industry employment structure. At the same time, based on the spatial Durbin model, the existence of spatial spillover effects in the digital economy has been directly confirmed, and the development of the digital economy can simultaneously narrow the industry wage gap between the local and neighboring cities.

Key words: digital economy, industry wage gap, deviation in the industrial employment structure, spatial spillover effects