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Robots and Informal Employment in China
By Haiyan Lin
This paper examines labor adjustments between the informal and formal sectors in response to the adoption of industrial robots in China. Using a longitudinal household data from 2010 to 2018, I find that robotization increases informal employment. Quantitatively, one more robot per thousand workers increases the share of informal employment by 1.16 percentage points. The reallocation is not driven by new entrants or re-entrants, but by workers initially employed in the formal sector. Displaced formal workers tend to transition into non-manufacturing or non-routine jobs in the informal sector. Lastly, this study explores labor adjustments within households, revealing that wives (daughters) are more likely to enter the labor force and take up informal jobs if their husbands (mothers) work in the informal sector than in the formal sector.
Source SSRN
