Robot Application and Labor Force Employment: Substitution or Complementation? —An Empirical Analysis Based on the Data from 22 Economies

Zheng Lilin and Liu Dongsheng
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Zheng Lilin: School of Management Science and Engineering, Anhui University of Finance and Economics, Hefei, China
Liu Dongsheng: School of Management Science and Engineering, Anhui University of Finance and Economics, Hefei, China

China Finance and Economic Review, 2023, vol. 12, issue 4, 65-85

Abstract: The rise of robotics has brought great uncertainty to the labor market. Based on the sectoral data from 22 economies during 2008–2019, this paper explores the impact of robot application on employment. The results show that, on the whole, robot application will have complementary effects on lab or force employment, and the grouped regression by economic development level and demographic characteristics supports this conclusion, while the effect of robot application on labor force employment is significantly different by industry. Further research shows that the degree of robot use is the key factor that determines the effect of robots on employment, and the complementary effect is dominant in economies with low degree of robot application, and the subtitution effect is dominant in economies with high degree of robot application. In addition, obvious spillover effects are observed in robotic application. On the one hand, robot application will have a forward crowding– out effect and a reverse siphon effect, which drive the labor force moving from the primary industry to the secondary and tertiary industries. On the other hand, robot application will also have heterogeneous effects on the labor force employment of economies in the upstream and downstream position along the value chain through the transmission effect of the Global Value Chains (GVC). The conclusions of this paper provide some practical implications for the rational formulation of artificial intelligence plans in the context of “stabilizing employment”.

Keywords: robots; labor force employment; substitution effect; complementary effect (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:cferev:v:12:y:2023:i:4:p:65-85:n:2

DOI: 10.1515/cfer-2023-0022

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