Abstract: Based on inter-city input-output data and the CHIP survey data, this paper analyzes the impact of digital product and digital service inputs in the manufacturing industry on the distribution of labor income. The results show that digital inputs in the manufacturing industry not only significantly increase the labor income levels, but also reduce the income disparities among individuals. The improvement effect of digitalization investment in the manufacturing industry on income distribution mainly comes from the digital product inputs. Digital product inputs tend to favor low-skilled labor in terms of labor demand and income distribution, making digitization investment in the manufacturing industry a key driver for achieving common prosperity. The more rational the industrial structure, the more pronounced the income-enhancing and gap-narrowing effects of digital inputs in the manufacturing industry. These research conclusions provide a new path for promoting high-quality development and achieving common prosperity through industrial digitalization.
