Will advancement in technologies bring fear and damage human employment? Evidence from China's manufacturing industry.

Abstract

Advancement in technologies such as robotic industries and artificial intelligence bring fear among human being that jobs will be substituted by robots. Base on the panel data of 28 China's manufacturing industries, this research analyzed the impact of technical progress bias on employment. First, we calculate the technical progress bias index of 28 industries base on the stochastic frontier model with transcendental logarithm function found 16 industries were toward the skilled labor while the remaining 12 industries were toward the unskilled labor. Second, the empirical results show that technical progress bias has a positive impact on the total manufacturing employment and significant positive effect on the unskilled labor, while no significant impact on skilled labor employment. Third, the threshold effect test proves that if taking industry value-added per capita or R&D capital stock as threshold variable, the threshold about the impact exist, making the impact on skilled labor was insignificant.