Abstract
This paper investigates the role of the internet technology in explaining the process of employment structural transformation under background of “Internet Plus” in China. We develop an employment structural transformation model which is impacted by the substitution effect and pervasiveness effect of internet technology, and show that the sectoral reallocation of employment out of agriculture and manufacturing into services when the substitution between manufacturing and service goods is too elastic and the internet technology penetration to total factor productivity of services is greater than the penetration of manufacturing. Our further empirical analysis confirms the conclusion deduced by the model. These results verify the “Internet Plus” plan can promote the productivity and accelerate the employment structural transformation and upgrading in China.
Highlights
The “Internet Plus” action plan was officially unveiled in the 2015 China Government Work Report, which represents a new economic form
We develop an employment structural transformation model which is impacted by the substitution effect and pervasiveness effect of internet technology, and show that the sectoral reallocation of employment out of agriculture and manufacturing into services when the substitution between manufacturing and service goods is too elastic and the internet technology penetration to total factor productivity of services is greater than the penetration of manufacturing
This paper investigates the role of internet technology in the employment structural change under the background of “Internet Plus” in China and presents an empirical methodology to disentangle the reallocation of employment associated with the internet technology progress differences across sectors
Summary
The “Internet Plus” action plan was officially unveiled in the 2015 China Government Work Report, which represents a new economic form. This paper will focus on the role of internet technology in the employment structural transformation under the background of “Internet Plus” in China. Our study is based on the example of the Chinese economy To address this issue, we begin by developing a model of the employment structural transformation across three sectors driven by the internet technology. This study represents the first empirical analysis of the penetration of the internet technology influencing employment share change in China. To confirm the essential link between internet technology and structural change, the paper contains an empirical analysis to outline the theoretical model of the impact of internet technology progress has on labor reallocation, by taking the model to the data for 31 provinces in China over the period 2003-2018.
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