Digital infrastructure development and its impact on labour market segmentation: the mediating role of regional innovation capacity and heterogeneous effects

The advancement of digital infrastructure holds immense significance in mitigating labour market segmentation. This paper empirically investigates the influence of digital infrastructure on labour market segmentation utilizing a two-way fixed effects model. The findings indicate that digital infrastructure exerts a substantial negative effect on labour market segmentation. Regional innovation capacity serves as a mediator in the development of digital infrastructure, influencing labour market segmentation accordingly. Moreover, heterogeneity analysis reveals that the impact of digital infrastructure on labour market segmentation is more pronounced in lower education. In light of these findings, it is advisable to strengthen digital infrastructure and prioritize the development of the labour market.