The impact of robots on informal employment: evidence from China

Abstract

ABSTRACT Informal employment, which has grown rapidly in recent years, is closely related to individual welfare, and is inevitably influenced by the rise of robots. Against this backdrop, this study aims to explore the impact of robots on informal employment. Applying a probit model and using data from the China Family Panel Studies in 2014, 2016, and 2018 and the International Federation of Robotics, this study reveals that robots do not have a significant impact on unemployment or labour force participation, but significantly increase the probability of informal employment. Further heterogeneity analysis indicates that robots have a greater positive impact on informal employment in the central and western regions of China. Moreover, individuals working in non-routine task-oriented industries, with higher general or specialized skills, exhibit a lower probability of being informally employed under the influence of robots. This study provides empirical evidence to maintain job market stability in the era of automation in China, which can also be used by policymakers in other countries.