The AI Redemption: How technology is rewriting the rules of cross-industry labor mobility
Year: 2025
Type: article
Abstract: This study considers the evolution and iteration of digital technology, conducting both theoretical and empirical research on the effects of information technology and artificial intelligence technology on cross-industry labor mobility. Theoretically, we construct a general equilibrium model that includes labor and digital technology to analyze the intrinsic mechanisms by which digital technology affects cross-industry labor mobility. Empirically, using the probit model and the instrumental variable approach, we find robust evidence of a significant positive effect of digital technology on cross-industry labor mobility through the pooled four-wave data from the China Family Panel Studies (CFPS) from 2014 to 2020. The findings indicate that digital technology significantly promotes cross-industry labor mobility. Mechanism analysis reveals that information technology, represented by computers, drives low-skilled labor towards non-skill-intensive industries through substitution and productivity effects, while artificial intelligence technology promotes the flow of both low-skilled and high-skilled labor towards skill-intensive industries through “de-skilling” and “re-skilling”. The impact of digital technology on cross-industry labor mobility varies significantly across different genders, the type of hukou , age, and employment types. Further mechanism analysis suggests that digital technology facilitates higher wage gains by promoting cross-industry labor mobility.
Authors: Su Zhang, Xiaolin Wang, Yan Xia, Huijuan Wang
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,930
Award: G4182044893
OpenAlex ID: W4413805561