The Impact of Artificial Intelligence on the Labor Skill Premium: Evidence from Chinese Listed Companies

With the rapid development of artificial intelligence (AI), its implications for income distribution have attracted increasing attention. As a key indicator of earnings differences between high- and low-skilled workers, the skill premium is important for distributional equity and sustainable economic and social development. Using AI-related patent data from Chinese listed firms, this paper constructs a firm-level measure of AI development and examines its impact on the skill premium within firms. The results show that AI development significantly increases the firm-level skill premium. Mechanism analysis suggests that AI increases the firm-level skill premium by substituting for low-skilled labor, improving firm productivity, promoting capital deepening, and facilitating technological upgrading. The main findings remain robust after addressing endogeneity using an instrumental variable approach and conducting a series of robustness checks, including alternative constructions and measures of the dependent variable, alternative measures of AI development, AI pilot zone policy shock tests, and alternative sample restrictions. Heterogeneity analysis further shows that the effect is more pronounced in non-state-owned firms, firms with higher levels of digitalization, and firms operating in industries with lower market concentration. Further analysis indicates that AI development may also reduce firms’ labor income share and widen income disparities across industries. These findings highlight the need to strengthen workers’ skills and adaptability, improve income distribution mechanisms, and promote a more balanced relationship between technological progress and social equity.