"Machine replacement" or "job creation": How does artificial intelligence impact employment patterns in China's manufacturing industry?

Abstract

Artificial intelligence (AI), as an important engine for promoting high-quality economic development, should not be overlooked in terms of its impact on the employment of the labor force while promoting the digital and intelligent transformation of industries. In the face of the complex international environment and non-systemic shocks, it is of great significance to explore whether it is "machine replacement" or "job creation" in the process of the integration of AI and industry, as well as the impact of technological progress on the employment pattern of the labor force, in order to promote the economic development, respond to and solve the employment problem. It is of great significance to promote economic development and cope with and solve the employment problem. Based on the task model, this paper analyses the mechanism of the impact of AI on the employment pattern of manufacturing industry. Meanwhile, based on the provincial panel data of China's manufacturing industry from 2011 to 2020, it empirically examines the impact of AI on the total employment, employment structure and employment quality of the labor force, and analyses the multiple responses of AI on the employment pattern of the manufacturing industry. The study shows that: Firstly, the level of development of AI and the total amount of employment is a positive U-shaped relationship, the short term is dominated by the substitution effect, and the long term is dominated by the creation effect; Secondly, with regard to the employment structure, low-skilled labor is more likely to be replaced. The financial, accommodation and catering industries are relatively less affected by the spillover effects of the manufacturing industry; Third, with regard to the employment quality, the gap between urban and rural incomes has eased, with per capita net income of rural residents rising to a higher degree than per capita disposable income of urban residents. Thus, in order to further address the impact of AI on the employment patterns of the labor force, the level of AI development should be increased while expanding employment channels, paying attention to labor force skills training, reinforcing the leading role of developed regions, and accelerating regional integration and urban-rural integration, so as to share the dividends of technological progress.

Keywords: AI; employment quality; employment structure; industry spillover; total employment.