IDEAS home Printed from https://ideas.repec.org/a/eee/teinso/v85y2026ics0160791x25003744.html

How can robots coexist with labor employment?—Empirical evidence based on matching data of Chinese industrial robots

Author

Listed:
  • Du, Jun-Hong
  • Tian, Meng-Nan
  • Yang, Zhi-Liang

Abstract

The harmonious coexistence of robots and the workforce in the era of artificial intelligence is crucial for China's high-quality economic development and the promotion of Chinese-style modernization. This study constructs an estimation method for the elasticity of substitution based on a nested CES production function model with three factors. By utilizing manufacturing data from 2006 to 2019 in China and robot data from the International Federation of Robotics (IFR), we estimate the elasticity of substitution between robots and labor. The research findings indicate that there is a complementary relationship between robots and labor in China's manufacturing sector, and that the combination of robots and labor is also complementary with nested capital. However, across manufacturing sub-sectors, the elasticity of substitution between robots and labor exceeds unity in some industries (classified as substitution industries) and falls below unity in others (complementary industries). Moreover, robot adoption exerts a significant crowding-out effect on labor in substitution industries, whereas its impact remains statistically insignificant in complementary industries. By estimating substitution elasticities, this study provides compelling evidence of a strong symbiotic relationship between robot deployment and employment. These findings offer policymakers in the AI era valuable insights to promote high-quality, inclusive employment in the manufacturing sector.

Suggested Citation

  • Du, Jun-Hong & Tian, Meng-Nan & Yang, Zhi-Liang, 2026. "How can robots coexist with labor employment?—Empirical evidence based on matching data of Chinese industrial robots," Technology in Society, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:teinso:v:85:y:2026:i:c:s0160791x25003744
    DOI: 10.1016/j.techsoc.2025.103184
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0160791X25003744
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techsoc.2025.103184?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    2. Friedrich Kreuser & Rulof Burger & Neil Rankin, 2015. "The elasticity of substitution and labour-displacing technical change in post-apartheid South Africa," WIDER Working Paper Series wp-2015-101, World Institute for Development Economic Research (UNU-WIDER).
    3. David Klenert & Enrique Fernández-Macías & José-Ignacio Antón, 2023. "Do robots really destroy jobs? Evidence from Europe," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(1), pages 280-316, February.
    4. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2022. "Artificial Intelligence and Jobs: Evidence from Online Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 293-340.
    5. Du, Junhong & He, Jiajia & Yang, Jing & Chen, Xiaohong, 2024. "How industrial robots affect labor income share in task model: Evidence from Chinese A-share listed companies," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    6. Joel Kariel, 2021. "Job Creators or Job Killers? Heterogeneous Effects of Industrial Robots on UK Employment," LABOUR, CEIS, vol. 35(1), pages 52-78, March.
    7. 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.
    8. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    9. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    10. repec:ags:aaea22:335879 is not listed on IDEAS
    11. Manu, Ana-Simona, 2022. "How sectoral technical progress and factor substitution shaped Japan’s structural transformation?," Working Paper Series 2641, European Central Bank.
    12. Hong Cheng & Ruixue Jia & Dandan Li & Hongbin Li, 2019. "The Rise of Robots in China," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 71-88, Spring.
    13. Önder Nomaler & Bart Verspagen, 2020. "Perpetual growth, the labor share, and robots," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 29(5), pages 540-558, July.
    14. Zha, Donglan & Zhou, Dequn, 2014. "The elasticity of substitution and the way of nesting CES production function with emphasis on energy input," Applied Energy, Elsevier, vol. 130(C), pages 793-798.
    15. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum & Nicole Woessner, 2021. "The Adjustment of Labor Markets to Robots [“Skills, Tasks and Technologies: Implications for Employment and Earnings]," Journal of the European Economic Association, European Economic Association, vol. 19(6), pages 3104-3153.
    16. repec:oup:qjecon:v:129:y:2013:i:1:p:61-103 is not listed on IDEAS
    17. Daron Acemoglu & Pascual Restrepo, 2018. "Low-Skill and High-Skill Automation," Journal of Human Capital, University of Chicago Press, vol. 12(2), pages 204-232.
    18. Duan, Dingyun & Chen, Shaojian & Feng, Zongxian & Li, Jun, 2023. "Industrial robots and firm productivity," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 388-406.
    19. Enzo Valentini & Fabiano Compagnucci & Mauro Gallegati & Andrea Gentili, 2023. "Robotization, employment, and income: regional asymmetries and long-run policies in the Euro area," Journal of Evolutionary Economics, Springer, vol. 33(3), pages 737-771, July.
    20. Liang Liu & Lianshui Li, 2021. "The effect of directed technical change on carbon dioxide emissions: evidence from China’s industrial sector at the provincial level," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(3), pages 2463-2486, July.
    21. Tsu-ting Tim Lin & Charles L. Weise, 2019. "A New Keynesian Model with Robots: Implications for Business Cycles and Monetary Policy," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(1), pages 81-101, March.
    22. Ballestar, María Teresa & Díaz-Chao, Ángel & Sainz, Jorge & Torrent-Sellens, Joan, 2021. "Impact of robotics on manufacturing: A longitudinal machine learning perspective," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    23. Zhang, Yi & Wang, Ting & Liu, Chun, 2024. "Beyond the modern productivity paradox: The effect of robotics technology on firm-level total factor productivity in China," Journal of Asian Economics, Elsevier, vol. 90(C).
    24. Jin, Yanhong & Li, Daiyue & Cheng, Mingwang, 2023. "Industrial Robots and Firm Productivity: Evidence from China," 2023 Annual Meeting, July 23-25, Washington D.C. 335879, Agricultural and Applied Economics Association.
    25. DeCanio, Stephen J., 2016. "Robots and humans – complements or substitutes?," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 280-291.
    26. van der Werf, Edwin, 2008. "Production functions for climate policy modeling: An empirical analysis," Energy Economics, Elsevier, vol. 30(6), pages 2964-2979, November.
    27. Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
    28. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    29. Ballestar, María Teresa & Díaz-Chao, Ángel & Sainz, Jorge & Torrent-Sellens, Joan, 2020. "Knowledge, robots and productivity in SMEs: Explaining the second digital wave," Journal of Business Research, Elsevier, vol. 108(C), pages 119-131.
    Full references (including those not matched with items on IDEAS)

    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. Du, Junhong & He, Jiajia & Yang, Jing & Chen, Xiaohong, 2024. "How industrial robots affect labor income share in task model: Evidence from Chinese A-share listed companies," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    2. Yingjie Xu & Bingchao Zheng & Baojie Guo, 2025. "How Do Industrial Robots Affect the Total Factor Productivity in Manufacturing Enterprises?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(4), pages 14057-14093, October.
    3. Tianru Qin & Lin Liang & Peng Liang & Wenqun Liang, 2025. "Can industrial robot utilization drive the total factor productivity of enterprises?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(1), pages 129-148, January.
    4. Caselli, Mauro & Fracasso, Andrea & Scicchitano, Sergio & Traverso, Silvio & Tundis, Enrico, 2025. "What workers and robots do: An activity-based analysis of the impact of robotization on changes in local employment," Research Policy, Elsevier, vol. 54(1).
    5. Jurkat, Anne & Klump, Rainer & Schneider, Florian, 2025. "Robots and wages: A meta-analysis," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 541-567.
    6. Qiao, Xiaole & He, Yang & Du, Qiang, 2025. "How does the urban digital economy drive labor allocation in China?—A perspective of factor mobility between digital and non-digital enterprises," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1159-1175.
    7. Cheng, Can & Luo, Jiayu & Zhu, Chun & Zhang, Shangfeng, 2024. "Artificial intelligence and the skill premium: A numerical analysis of theoretical models," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    8. Fierro, Luca Eduardo & Caiani, Alessandro & Russo, Alberto, 2022. "Automation, Job Polarisation, and Structural Change," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 499-535.
    9. Borsato, Andrea & Lorentz, André, 2023. "The Kaldor–Verdoorn law at the age of robots and AI," Research Policy, Elsevier, vol. 52(10).
    10. Nikolaos Charalampidis, 2024. "Frictions and the diffusion of automation," Manchester School, University of Manchester, vol. 92(2), pages 148-170, March.
    11. Wang, Linhui & Cao, Zhanglu & Dong, Zhiqing, 2023. "Are artificial intelligence dividends evenly distributed between profits and wages? Evidence from the private enterprise survey data in China," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 342-356.
    12. Ghodsi, Mahdi & Stehrer, Robert & Barišić, Antea, 2024. "Assessing the impact of new technologies on wages and labour income shares," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    13. Florian Schneider, 2026. "Do robots boost productivity? A quantitative meta‐study," Journal of Economic Surveys, Wiley Blackwell, vol. 40(3), pages 1531-1571, July.
    14. Wang, Linlin & Liu, Chun & Liu, Ding & Zhang, Yi, 2025. "Beyond jobs and wages: The hidden cost of automation on corporate social security contributions," International Review of Financial Analysis, Elsevier, vol. 106(C).
    15. Franco, Chiara & Suppressa, Francesco, 2025. "Robot, trade and employment: Unravelling the relationship within the European context," Structural Change and Economic Dynamics, Elsevier, vol. 73(C), pages 407-422.
    16. repec:ces:ceswps:_10955 is not listed on IDEAS
    17. Sun, Hongye & Gao, Gongjing, 2025. "The impact of intelligent automation on subjective well-being and job satisfaction: A comparison between standard and nonstandard employment," China Economic Review, Elsevier, vol. 94(PB).
    18. Scavino Alfaro, Vicenzo, 2025. "Automation, market power, and the citizen dividend: a DSGE-HANK with antitrust and a citizen sovereign wealth fund," MPRA Paper 127515, University Library of Munich, Germany.
    19. Nikolaos Charalampidis & Mananirina Razafitsiory, 2025. "Automation in an estimated small open economy model," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(3), pages 1017-1043, August.
    20. Fernández-Macías, Enrique & Klenert, David & Antón, José-Ignacio, 2021. "Not so disruptive yet? Characteristics, distribution and determinants of robots in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 76-89.
    21. Cao, Yuanyuan & Chen, Shaojian & Tang, Heyan, 2025. "Robot adoption and firm export: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 210(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other

    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:teinso:v:85:y:2026:i:c:s0160791x25003744. 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: https://www.journals.elsevier.com/technology-in-society .

    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.