Digital Divide: Evidence from the 2020 Canadian Internet Use Survey

TL;DR

This study analyzes digital participation inequality in Canada using survey data, identifying key socioeconomic and demographic factors, and examining the role of digital literacy and accessibility barriers across different online activities.

Contribution

It introduces a comprehensive analysis combining advanced statistical methods and digital literacy measures to understand persistent digital divides and their underlying causes.

Findings

Education remains a consistent determinant of digital participation.

Income inequality is most pronounced in virtual-wallet adoption.

Accessibility barriers significantly affect persons with disabilities at the digital-payments stage.

Abstract

This paper studies inequality in digital participation across socioeconomic and demographic groups using the 2020 Canadian Internet Use Survey (CIUS). We combine survey-weighted logistic Lasso, an exact Shapley decomposition of age--education gaps, a sequential logit, and a bifactor item response theory (IRT) measure of digital literacy to identify who is excluded, why gaps persist, and where along the adoption path they arise. Education is the only determinant that remains significant at every rung of the digital ladder. Income inequality is most pronounced for virtual-wallet adoption; for online banking, employment and education together account for nearly half of the pro-rich concentration, indicating a broad socioeconomic gradient rather than a purely income-based divide. Persons with disabilities face the largest penalty at the digital-payments stage rather than at online banking, pointing to accessibility gaps in retail payment interfaces. Conditioning on digital literacy eliminates the education gradient at internet entry and reduces it by 61\% at the online banking rung, but a substantial residual persists, pointing to behavioral and institutional frictions beyond measurable competence. The youngest cohort records the lowest information-seeking score despite high digital engagement, and security deficits are concentrated among landed immigrants and visible minorities.