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Effect of AI on China’s Labor Market

Mar 25-2020   



By 2049, up to 278 million Chinese workers will have been displaced by AI, says a paper in China Economic Journal, an academic journal affiliated with the NSD and published by Routledge Journals.

 

The research paper, The Effect of Artificial Intelligence on China’s Labor Market, was co-authored by Prof. Li Lixing of the NSD and three other scholars. It reckons that as China works to become a major AI innovation center in the world, AI will exert a slew of impacts on the job market and on income, equality and social stability.

 

The net impact of AI on the labor market is yet to be fully gauged, for it depends on the quantitative difference between the jobs it creates and the jobs it replaces. What the authors have identified is that structural disparity of job replacement can be expected, namely laborers at a disadvantage – female workers, elderlies, low-education laborers and low-income ones - are more susceptible to be displaced by AI. As a result, they might slide even further into disadvantaged positions.

 

In cities, 142 million jobs might have been lost to AI by 2049, amounting to 32.7% of total urban employment, while the figures in the countryside will be 135 million and 39.5% respectively.

 

Conceding that AI might contribute in certain areas, the authors hope that the research will offer first-hand empirical evidences to inform policy-making. The government is advised to keep investing in and improving the human capital of Chinese laborers. More measures such as vocational training should be taken to assist disadvantaged groups and mitigate the negative effects of AI. The government should also zoom in on the widening wealth gap and inequality likely to be engendered by AI. High-skilled and low-skilled workers are destined to fare wildly differently in the age of AI, hence a possible aggravation of social instability. The government can use taxation and redistributive systems to solve such issues, including taxing AI equipment or robots to subsidize workers or help them improve skills.

 

 

Effect of AI on China’s Labor Market

Mar 25-2020   



By 2049, up to 278 million Chinese workers will have been displaced by AI, says a paper in China Economic Journal, an academic journal affiliated with the NSD and published by Routledge Journals.

 

The research paper, The Effect of Artificial Intelligence on China’s Labor Market, was co-authored by Prof. Li Lixing of the NSD and three other scholars. It reckons that as China works to become a major AI innovation center in the world, AI will exert a slew of impacts on the job market and on income, equality and social stability.

 

The net impact of AI on the labor market is yet to be fully gauged, for it depends on the quantitative difference between the jobs it creates and the jobs it replaces. What the authors have identified is that structural disparity of job replacement can be expected, namely laborers at a disadvantage – female workers, elderlies, low-education laborers and low-income ones - are more susceptible to be displaced by AI. As a result, they might slide even further into disadvantaged positions.

 

In cities, 142 million jobs might have been lost to AI by 2049, amounting to 32.7% of total urban employment, while the figures in the countryside will be 135 million and 39.5% respectively.

 

Conceding that AI might contribute in certain areas, the authors hope that the research will offer first-hand empirical evidences to inform policy-making. The government is advised to keep investing in and improving the human capital of Chinese laborers. More measures such as vocational training should be taken to assist disadvantaged groups and mitigate the negative effects of AI. The government should also zoom in on the widening wealth gap and inequality likely to be engendered by AI. High-skilled and low-skilled workers are destined to fare wildly differently in the age of AI, hence a possible aggravation of social instability. The government can use taxation and redistributive systems to solve such issues, including taxing AI equipment or robots to subsidize workers or help them improve skills.