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.
