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Impact of Artificial Intelligence on Occupational Income Inequality in China

Author

Listed:
  • Jing Yuan

    (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China)

  • Mengjie Han

    (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China)

  • Jinxin Cao

    (School of Statistics, Shandong Technology and Business University, Yantai, Shandong 264005, China)

  • Zongwu Cai

    (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA)

Abstract

Using data from the China Family Panel Studies, this paper empirically examines the impact of artificial intelligence (AI) on occupational income inequality by employing the Pareto coefficient to measure the degree of within-occupation income inequality in China. The results show that income inequality across occupations has markedly increased in recent years. Provinces with a relatively high level of occupational income inequality are concentrated primarily in the eastern and central regions in China, whereas the level is notably lower in the western region. Also, AI significantly widens occupational income gaps. Further, mediation analysis reveals that AI significantly aggravates occupational income inequality through two channels: industrial sophistication and technological innovation. Regional heterogeneity analysis indicates significant regional disparities in this effect. The impact is significant and strongest in Western China, significant but moderate in Eastern China, and statistically insignificant in Central China. Going forward, China should improve the regulatory and adjustment mechanisms for occupational earnings, establish a systematic occupational income monitoring system, and deepen the reform of the income distribution system. These measures will help narrow occupational income gaps driven by the skill premium and advance the achievement of common prosperity.

Suggested Citation

  • Jing Yuan & Mengjie Han & Jinxin Cao & Zongwu Cai, 2025. "Impact of Artificial Intelligence on Occupational Income Inequality in China," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202504, University of Kansas, Department of Economics, revised Mar 2026.
    • Handle: RePEc:kan:wpaper:202504
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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