"Does artificial intelligence affect the pattern of skill demand? Evidence from Chinese manufacturing firms"

by Xie, Mengmeng; Ding, Lin; Xia, Yan; Guo, Jianfeng; Pan, Jiaofeng; Wang, Huijuan (2021)

Abstract

In view of the recent penetration of artificial intelligence (AI) into production activities, we undertake a quasi-natural experiment to identify its impact on employment at different skill levels using micro-enterprise data from Chinese manufacturing during 2011–2017. Employing a robust difference-in-differences method with propensity score matching, we investigate the heterogeneous impact of AI adoption upon different skills across three dimensions — geographical regions, enterprise types, and the length of time since the adoption of AI. We find that AI reduces the relative demand for low-skilled labor across all regions in China, while increasing the relative demand for high-skilled labor only in the eastern region. These differential impacts of AI upon relative demand for different skills reflect firm-level technological intensity. Results also show that the longer the duration of AI use, the greater is the impact upon the relative demand for high-skilled labor.

Keywords

Artificial Intelligence, Skill Demand, Heterogeneity Analysis, Robust Did, China Manufacturing

Themes

Skills, Automation

Links to Reference

• https://www.sciencedirect.com/science/article/pii/S0264999321000171
• http://dx.doi.org/10.1016/j.econmod.2021.01.009
• https://www.sciencedirect.com/science/article/pii/S0264999321000171?casa_token=MKeibz3PiV0AAAAA:Y8VM7xnBhp69tG_L5kjgSp_w7Veoq860LQ8I_5tlaxTNK-Bkx9dxTZT_sjmJ13m2ZSLaYxX2

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