Industrial Robots and Jobs Turnover: Evidence from Chinese Firm Level Data

The race between industrial robots and human, not only for the developed countries, but also for emerging market countries, especially China, is widely discussed among economists and policy makers. China, as the largest industrial nation, is struggling for structural transformation and industrial upgrading with the disappearance of demographic dividend. And the large scale application of industrial robot in China would influence employment and productivity undoubtedly in this time period. Based on China Employer-Employee Survey (CEES), which is a new longitudinal study of manufacturing firms and workers in China, we use propensity score matching method and machine learning method to estimate industrial robots' substitution effect on labor force in Chinese manufacturing enterprises. Our empirical results indicate that manufacturing enterprise's investment in industrial robots cause 12%-16% decline of employment in 2014 in Guangdong province, and this replacement effect is Heterogeneous among different type of labors where workers would suffer the greatest impact. Besides we also examine robot's effect on enterprise performance and worker wage. We find that for the enterprise performance, robot's investment can promote their productivity and profit, and for workers, robots could promote their wages. To the best of our knowledge, this paper is the first paper to provide empirical evidence of industrial robots’ impact on labor and enterprise performance in China,and our findings have several policy implications.Firstly, our findings may help scholars to reassess technology progress impact on Chinese labor market and industrial transformation. Secondly, for the policy makers, especially in the process of Made in China 2025, our research may remind them of the balance between efficiency and unemployment.