IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v72y2021icp156-168.html
   My bibliography  Save this article

Information technology and the labor market in China

Author

Listed:
  • Zhang, Fan
  • Meng, Lei
  • Sun, Wen
  • Si, Yanwu

Abstract

In this paper, we examine the influence of investment of corporate capital, which we capture through heterogeneous company information technology utilization, on labor demand and labor income share. We find that increased investment in information technology by enterprises is associated with a general decrease in the proportion of labor income and the demand for labor. We also find that if the market power of enterprises in the industry is greater, the increase in investment of enterprise information technology capital is even less conducive to the willingness of enterprises to hire workers. Our results have implications for guidance towards corporate (information technology) investment decision-making.

Suggested Citation

  • Zhang, Fan & Meng, Lei & Sun, Wen & Si, Yanwu, 2021. "Information technology and the labor market in China," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 156-168.
    • Handle: RePEc:eee:ecanpo:v:72:y:2021:i:c:p:156-168
    DOI: 10.1016/j.eap.2021.06.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592621000928
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2021.06.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    2. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    3. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    4. Bruno Decreuse & Paul Maarek, 2015. "FDI and the Labor Share in Developing Countries : A Theory and Some Evidence," Annals of Economics and Statistics, GENES, issue 119-120, pages 289-319.
    5. Ulrich Kaiser, 2001. "The Impact of Foreign Competition and New Technologies on the Demand for Heterogeneous Labor," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(1), pages 109-120, August.
    6. Kong, Dongmin & Shi, Lu & Zhang, Fan, 2021. "Explain or conceal? Causal language intensity in annual report and stock price crash risk," Economic Modelling, Elsevier, vol. 94(C), pages 715-725.
    7. John Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2008. "The Demand for Labor: An Analysis Using Matched Employer–Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," Journal of Labor Research, Springer, vol. 29(2), pages 114-137, June.
    8. Dale W. Jorgenson, 2007. "Information Technology and the G7 Economies," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 325-350, National Bureau of Economic Research, Inc.
    9. Wang, Jialong & Zhang, Jian & Huang, Haoyue & Zhang, Fan, 2020. "Directors’ and officers’ liability insurance and firm innovation," Economic Modelling, Elsevier, vol. 89(C), pages 414-426.
    10. Juann H Hung & Priscila Hammett, 2016. "Globalization and the Labor Share in the United States," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(2), pages 193-214, March.
    11. Ernest P. Goss & Joseph M. Phillips, 2002. "How Information Technology Affects Wages: Evidence Using Internet Usage As a Proxy for IT Skills," Journal of Labor Research, Transaction Publishers, vol. 23(3), pages 463-474, July.
    12. Sergejs Gubins & Jos Ommeren & Thomas Graaff, 2019. "Does new information technology change commuting behavior?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(1), pages 187-210, February.
    13. Lihong Yun, 2008. "Technical Progress and Labour Demand in Swedish Manufacturing Firms," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 147-167, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiang, Pengcheng & Jiang, Hongli, 2023. "Green finance policy and labor demand," Economics Letters, Elsevier, vol. 225(C).
    2. Bosede Ngozi Adeleye & Bede Uzoma Achugamonu & Tayo George & Mercy Ejovwokeoghene Ogbari & Oluyomi Ola-David, 2023. "ICT Leapfrogging Amidst Labour Force-Economic Growth Nexus in EAP and ECA Regions," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 70(1), pages 17-40, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kariem Soliman, 2021. "Are Industrial Robots a new GPT? A Panel Study of Nine European Countries with Capital and Quality-adjusted Industrial Robots as Drivers of Labour Productivity Growth," EIIW Discussion paper disbei307, Universitätsbibliothek Wuppertal, University Library.
    2. Paul Maarek & Elsa Orgiazzi, 2020. "Development and the Labor Share," The World Bank Economic Review, World Bank, vol. 34(1), pages 232-257.
    3. Ibarra, Carlos A. & Ros, Jaime, 2023. "Trade and factor intensity, and the transmission of the global shock to labor: A panel analysis of the fall of the labor income share in the Mexican manufacturing sector," Economic Systems, Elsevier, vol. 47(1).
    4. Cardi, Olivier & Restout, Romain, 2023. "Sectoral fiscal multipliers and technology in open economy," Journal of International Economics, Elsevier, vol. 144(C).
    5. Kónya, István & Oblath, Gábor & Krekó, Judit, 2021. "A bérhányad alakulása Magyarországon és Európában [The labour share in Hungary and Europe]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1021-1054.
    6. François Facchini & Mickael Melki & Andrew Pickering, 2017. "Labour Costs and the Size of Government," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(2), pages 251-275, April.
    7. Young, Andrew T. & Tackett, Maria Y., 2018. "Globalization and the decline in labor shares: Exploring the relationship beyond trade and financial flows," European Journal of Political Economy, Elsevier, vol. 52(C), pages 18-35.
    8. Huang, Junbing & Cai, Xiaochen & Huang, Shuo & Tian, Sen & Lei, Hongyan, 2019. "Technological factors and total factor productivity in China: Evidence based on a panel threshold model," China Economic Review, Elsevier, vol. 54(C), pages 271-285.
    9. Onur Özdemir, 2020. "The handicap for enhanced solidarity across advanced economies: The greater the economic openness higher the unequal distribution of income," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(4), pages 585-632, December.
    10. Corbellini, Aldo & Magnani, Marco & Morelli, Gianluca, 2021. "Labor market analysis through transformations and robust multivariate models," Socio-Economic Planning Sciences, Elsevier, vol. 73(C).
    11. Gilbert Cette & Sandra Nevoux & Loriane Py, 2022. "The impact of ICTs and digitalization on productivity and labor share: evidence from French firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 31(8), pages 669-692, November.
    12. Chih‐Hai Yang & Meng‐Wen Tsou, 2021. "Globalization and the labor share in China: Firm‐level evidence," Manchester School, University of Manchester, vol. 89(1), pages 1-23, January.
    13. Liu, Xiufen & Fang, Hongsheng & Zhao, Lexin & Xu, Wenli, 2023. "Do VAT cuts help stabilize employment? Evidence from China’s VAT rate reform," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 190-207.
    14. Kerstin Hotte & Melline Somers & Angelos Theodorakopoulos, 2022. "Technology and jobs: A systematic literature review," Papers 2204.01296, arXiv.org.
    15. Kónya, István & Krekó, Judit & Oblath, Gábor, 2020. "Labor shares in the old and new EU member states - Sectoral effects and the role of relative prices," Economic Modelling, Elsevier, vol. 90(C), pages 254-272.
    16. Katharina van Treeck & Konstantin M. Wacker, 2020. "Financial globalisation and the labour share in developing countries: The type of capital matters," The World Economy, Wiley Blackwell, vol. 43(9), pages 2343-2374, September.
    17. Taining Wang & Jinjing Tian, 2020. "Recasting the trade impact on labor share: a fixed-effect semiparametric estimation study," Empirical Economics, Springer, vol. 58(5), pages 2465-2511, May.
    18. Ibarra, Carlos A. & Ros, Jaime, 2019. "The decline of the labor income share in Mexico, 1990–2015," World Development, Elsevier, vol. 122(C), pages 570-584.
    19. Anderton, Robert & Jarvis, Valerie & Labhard, Vincent & Morgan, Julian & Petroulakis, Filippos & Vivian, Lara, 2020. "Virtually everywhere? Digitalisation and the euro area and EU economies," Occasional Paper Series 244, European Central Bank.
    20. Arif, Imran, 2021. "Productive knowledge, economic sophistication, and labor share," World Development, Elsevier, vol. 139(C).

    More about this item

    Keywords

    Information capital; Employment; Labor income share;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:72:y:2021:i:c:p:156-168. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.