Abstract: Income inequality is a major manifestation of China's unbalanced economic development.Based on the 2014 China Household Tracking Survey (CFPS) data, this paper empirically analyzes the relationship between Internet use and income distribution, and finds that Internet use has a significant blocking effect on the expansion of income gap of Chinese residents.Considering the endogenous problems caused by reverse causality,this paper uses the Internet use behavior and attitude distance and community Internet use as instrumental variables, indicating that the verification conclusion is reliable. In addition, the heterogeneity analysis shows that this effect is more significant in the low-level education, middle age and rural low-income groups. The mechanism analysis shows that the importance attached to the way of Internet use is an important transmission mechanism for the impact of Internet use on income distribution. Therefore, improving information infrastructure construction in poor areas, continuing to implement the relevant policies "Internet + rural areas" and promoting Internet use are important means to narrow the income gap between residents.

Key words: Internet Use, Internet Trade, Income Distribution, Income Gap, Inclusive Finance