Does robotization improve the skill structure? The role of job displacement and structural transformation

Abstract

ABSTRACT The literature generally focuses on the impact of robots or artificial intelligence on the employment and wages, but ignores the effect of robotization on the skill structure and its underlying mechanisms and lacks empirical evidence from developing countries. We theoretically develop a task model by introducing the skill structure and empirically investigate the effect of robotization on the skill structure based on Chinese provincial panel data from 2006 to 2018. Results show that: (1) the development of robotization in China is conducive to improving the skill structure, and the baseline conclusion still holds even though adopting multiple indexes of skill structure and controlling the endogeneity bias. (2) Robotization generates not only job displacement effect by displacing unskilled workers with robots but also structural transformation effect by increasing the proportion of technology-intensive industries, which can improve the skill structure. (3) In coastal provinces with strong Internet foundation, information transmission capacity and labour protection intensity, high labour cost and ageing rate, robotization plays a stronger role in improving the skill structure. Moreover, robotization can induce the employment polarization. These conclusions can help avoid technical unemployment and promote the upgrading of the skill structure in China.