Our senior student Yu Yan’s project on The Impact of Robots on Employment in China, carried out together with Shuyuan Zou and Xukun Long under the mentorship of Prof. Sisi Zhang, recently won the 2nd place in the 16th Challenge Cup, a national extracurricular science and technology work contest for college students across China.
This is the biggest competition of this kind in the country held annually since 1989, that attracts hundreds of colleges and universities to participate. This year, nearly 3 million students participated in the contest at a city and provincial level, of whom 1513 projects entered the national competition.
It is indeed an outstanding achievement which comes as a result of enormous effort our students put into the project over the last year. We could not be prouder!
Yu Yan and Xukun Long
The Impact of Robots on Employment in China
By Yu Yan, Shuyuan Zou and Xukun Long
Abstract
China has been the world's largest user of robots since 2013, and its market share continues to rise. In drawing on panel data from industrial firms in China that cover the period 2000-2007, we find that industrial robots are positively associated with firms’ labor demand. Our results suggest that one more robot increases a firm’s employment by an average of 0.13 percent. This positive effect is driven by the complementary effect that robots have on high-skilled workers, which outweighs the substitution effect on low-skilled counterparts. We also find that in high-risk industries, robots have a positive substitution effect. We further explore the relationship between robots and employment at the province level and find that robots increase total employment. More robots are associated with higher employment in the service, but not manufacturing, sector. We conduct field research to test the mechanism and find that, after robots are adopted, some workers transfer from previous tasks to manipulating or assisting robots on the assembly line. There are no large-scale layoffs – many of those replaced by robots find new jobs, and consequently the unemployment rate remains low. The entire labor market has a neutral attitude to the application of robots. Drawing on our findings, we outline policy recommendations for dealing with the structural shift in employment.
“Economics is a methodology of thinking rather than just a pool of information about this subject. It provides me with a unique and comprehensive analysis framework that can be used to shed light on all sorts of problems. In reality – things are intricately intertwined. The goal of economic research is to reveal causal relationships, which is hard, even though we are in the era of magnanimous data and intelligent tools. Thus, finding a meaningful and interesting topic in the beginning keeps me motivated even when things get hard. I am always skeptical about the conclusions I have drawn and prepared to refute them.”- Yu Yan
