Would workers value a few more hours of work? Technological progress and time-related underemployment among Chinese workers

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ABSTRACT The manifestation of insufficient labour demand has shifted from unemployment to underemployment. However, few studies have examined the impact of robotic technology on underemployment, particularly in terms of working hours rather than the unemployment rate. To address this gap, this paper first refines the calculation method proposed by Acemoglu and Restrepo (2019b) and remeasures the level of robot adoption across cities in China. The empirical relationship between robotic technology and underemployment is examined by matching this data with individual-level data from the China Labor Dynamics Survey. The study finds that robotic technology can effectively alleviate time-related underemployment, with a more pronounced effect in national innovation pilot cities. Mechanism analysis reveals that robotic technology enhances labour market opportunities by stimulating secondary innovations and attracting new firms while improving job matching quality by guiding workers in their job search and transitions, thereby alleviating underemployment. The study suggests that leveraging fiscal policy to support the growth of new enterprises or R&D innovations, eliminating barriers to labour mobility, and improving lifelong vocational training systems can help unlock the technological dividend and achieve high-quality full employment sooner.