Impact of Artificial Intelligence on Occupational Income Inequality in China

Jing Yuan, Mengjie Han, Jinxin Cao and Zongwu Cai
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Jing Yuan: School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China
Mengjie Han: School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China
Jinxin Cao: School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China
Zongwu Cai: Department of Economics, The University of Kansas, Lawrence, KS 66045, USA

No 202504, WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS from University of Kansas, Department of Economics

Abstract: Using data from the China Family Panel Studies, this paper empirically examines the impact of artificial intelligence (AI) on occupational income inequality by employing the Pareto coefficient to measure the degree of within-occupation income inequality in China. The results show that income inequality across occupations has markedly increased in recent years. Provinces with a relatively high level of occupational income inequality are concentrated primarily in the eastern and central regions in China, whereas the level is notably lower in the western region. Also, AI significantly widens occupational income gaps. Further, mediation analysis reveals that AI significantly aggravates occupational income inequality through two channels: industrial sophistication and technological innovation. Regional heterogeneity analysis indicates significant regional disparities in this effect. The impact is significant and strongest in Western China, significant but moderate in Eastern China, and statistically insignificant in Central China. Going forward, China should improve the regulatory and adjustment mechanisms for occupational earnings, establish a systematic occupational income monitoring system, and deepen the reform of the income distribution system. These measures will help narrow occupational income gaps driven by the skill premium and advance the achievement of common prosperity.

Keywords: Artificial intelligence; Industrial structure; Mediation analysis; Occupational income inequality; Regional heterogeneity; Technological innovation. (search for similar items in EconPapers)
JEL-codes: D31 D33 E25 O30 (search for similar items in EconPapers)
Date: 2025-02, Revised 2026-03
New Economics Papers: this item is included in nep-ain, nep-cna and nep-tid
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