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Does artificial intelligence affect the pattern of skill demand? Evidence from Chinese manufacturing firms

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  • Xie, Mengmeng
  • Ding, Lin
  • Xia, Yan
  • Guo, Jianfeng
  • Pan, Jiaofeng
  • Wang, Huijuan

Abstract

In view of the recent penetration of artificial intelligence (AI) into production activities, we undertake a quasi-natural experiment to identify its impact on employment at different skill levels using micro-enterprise data from Chinese manufacturing during 2011–2017. Employing a robust difference-in-differences method with propensity score matching, we investigate the heterogeneous impact of AI adoption upon different skills across three dimensions — geographical regions, enterprise types, and the length of time since the adoption of AI. We find that AI reduces the relative demand for low-skilled labor across all regions in China, while increasing the relative demand for high-skilled labor only in the eastern region. These differential impacts of AI upon relative demand for different skills reflect firm-level technological intensity. Results also show that the longer the duration of AI use, the greater is the impact upon the relative demand for high-skilled labor.

Suggested Citation

  • Xie, Mengmeng & Ding, Lin & Xia, Yan & Guo, Jianfeng & Pan, Jiaofeng & Wang, Huijuan, 2021. "Does artificial intelligence affect the pattern of skill demand? Evidence from Chinese manufacturing firms," Economic Modelling, Elsevier, vol. 96(C), pages 295-309.
    • Handle: RePEc:eee:ecmode:v:96:y:2021:i:c:p:295-309
    DOI: 10.1016/j.econmod.2021.01.009
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    13. Zuoyufan Sheng & Chengpeng Zhu & Mo Chen, 2024. "Exploring the Impact of the Digital Economy on Green Total Factor Productivity—Evidence from Chinese Cities," Sustainability, MDPI, vol. 16(7), pages 1-13, March.
    14. Filippi, Emilia & Bannò, Mariasole & Trento, Sandro, 2023. "Automation technologies and their impact on employment: A review, synthesis and future research agenda," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
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    16. Jean-Philippe Deranty & Thomas Corbin, 2022. "Artificial Intelligence and work: a critical review of recent research from the social sciences," Papers 2204.00419, arXiv.org.

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