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

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  • 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
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    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

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