 Impact of artificial intelligence on the labor income distribution: Labor substitution or production upgrading?Changlin Wang and Du Jiao Finance Research Letters, 2025, vol. 73, issue C Abstract: The extensive adoption of artificial intelligence (AI) technologies has sparked debates about their impact on labor markets. However, there is still limited empirical evidence on AI's impact on labor income distribution, particularly in emerging economies. While existing research focuses mainly on job displacement risks, few focus on how AI affects labor compensation in corporate settings. This study examines how AI adoption affects labor income share through a mediation analysis framework using a comprehensive dataset of 25,156 firm-year observations from Chinese listed companies (2010–2022). Our findings show that AI implementation positively influences labor income share through two key channels: improved innovation capacity and accelerated technology upgrading. These effects are more pronounced in nonstate-owned enterprises and nonheavy-polluting industries. These results challenge the conventional narrative of technology-driven labor displacement, suggesting that AI adoption, combined with investments in innovation and human capital, can promote a more equitable distribution of corporate income. Keywords: Artificial intelligence; Labor income share; Innovation capacity; Technology Upgrading (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324017033 DOI: 10.1016/j.frl.2024.106674 Access Statistics for this article Finance Research Letters is currently edited by R. Gençay More articles in Finance Research Letters from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.