Digitalization of Industries and Labor Mobility in China

This paper investigates impact of digital development on labor mobility decisions across Chinese industries using data from the China Family Panel Studies (2014-2018) and China’s Input-Output Table data. Our findings reveal a significant crowding-out effect of industry digitalization development on labor mobility, with a positive association between industry digitalization level and labor mobility probability. This association holds even after considering the endogeneity issue. Our results suggest that industry digitalization affects mobility decisions by increasing the demand for highly skilled personnel, modifying workers' job rights and interests, promoting changes in occupational prestige, and improving workers' subjective perceptions of employment challenges. The crowding-out effect of digitalization on the labor force is more pronounced for individuals belonging to regions with higher digitalization levels, industries in productive or consumer services, and individuals who are younger and work in self-employment or without labor contracts