Artificial Intelligence, Technological Innovation, and Employment Transformation for Sustainable Development: Evidence from China

Hui Liang, Jingbo Fan () and Yunhan Wang
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Hui Liang: School of Government, University of International Business and Economics, Beijing 100029, China
Jingbo Fan: School of Government, University of International Business and Economics, Beijing 100029, China
Yunhan Wang: Department of Academic Publications, University of International Business and Economics, Beijing 100029, China

Sustainability, 2025, vol. 17, issue 9, 1-28

Abstract: With the rapid advancement of artificial intelligence (AI) technology, the global employment structure is undergoing profound transformations, significantly impacting social sustainability. This study utilizes panel data from 30 Chinese provinces spanning the years 2010 to 2022 and applies a two-way fixed-effects model to analyze the impact of AI development on the employment skills structure. The findings indicate that advancements in AI technology significantly suppress the demand for low-skilled labor while markedly enhancing the demand for both middle- and high-skilled labor. The threshold effect analysis reveals a nonlinear relationship between AI advancements and the demand for low-skilled workers. Mediation effect tests demonstrate that technological innovation serves as a mediating factor in AI’s impact on low- and middle-skilled labor but has no significant effect on high-skilled labor. The heterogeneity analysis further indicates that AI’s negative impact on low-skilled female employment is more severe than for males, while its positive impact on high-skilled male workers is significant. Additionally, the employment effects of AI are mainly observed in labor-intensive provinces, with minimal influence in capital-intensive areas. This study suggests harnessing AI’s potential to promote employment while proactively mitigating its disruptive effects on the labor market through enhanced research and development support, strengthened employment security, and coordinated regional economic development, thereby advancing sustainable economic and social progress.

Keywords: artificial intelligence; employment skill structure; sustainable development; two-way fixed-effects model; technological innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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