Abstract:

This study, based on China Family Panel Studies data from 2012 to 2018, uses a Probit model to explore how robot shocks and industrial structure changes impact transitions in employment formality. Findings show that robot shocks unidirectionally drive workers from formal to informal employment, with no effect in the reverse direction. Industrial structure changes, however, do not influence formality choices. Heterogeneity analysis reveals that robot shocks achieve this effect by displacing formal employment in the secondary sector into informal employment in the tertiary sector, particularly affecting low-skilled workers and those in smaller cities. The paper provides new empirical evidence on employment formality issues in China, contributing to the understanding and pursuit of common prosperity goals.

Key words:

robot penetration, industrial structure changes, informal employment