Impact of Artificial Intelligence on Occupational Income Inequality in China

Jing Yuan, Yinghui Wang, Jinxin Cao and Zongwu Cai
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Jing Yuan: School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China
Yinghui Wang: 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 the Chinese CFPS database, this paper analyzes the impact of AI on occupational income inequality in China by using the Pareto coefficient. The empirical results show that AI has significantly widened the occupational income gap in China in recent years. Also, using results based on the mediation effect test concludes that AI widens the income gap significantly through the upgrading of the industrial structure and technological innovation. Furthermore, the analysis of regional heterogeneity reveals that the impact of AI on occupational income inequality is strongest in the northeastern region, followed by the western region, while the impacts in the central and eastern regions are relatively smaller. Finally, our analysis suggests that China should strengthen the supervision and adjustment mechanism of occupational income, establish a monitoring system for occupational income, and deepen the reform of the income distribution system, among other measures, to narrow the occupational income gap caused by the skill premium.

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 2025-02
New Economics Papers: this item is included in nep-ain, nep-cna and nep-tid
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