Robotization and labour demand in post-pandemic era: Microeconomic evidence from China

Abstract

We study how robotization, namely the “machine substitution” policy, impacts firms' labour demand in the post pandemic era. Using a unique firm-level data set of online job postings in Dongguan, known as “The World Factory” in China, we find that “machine substitution” policy fosters the funded firms to expand their labour demand. The expansion is mainly driven by the growing demand for manufacturing workers, which offsets the reduced demand for service workers. Also, the expansion can be attributed to an increase in the number of employees listed in job postings rather than an increase in position types. Further analysis suggests that this positive impact is mainly attributable to the productivity effect rather than the restatement effect. Furthermore, there is no evidence of heterogeneity by sector or firm size but the effect of the policy varies by regional epidemic severity. Our results not only reveal the labour demand in the Covid-19 but also provide prominent implications for occupational security and steady economic growth.