How does digital transformation relieve the employment pressure in China? Empirical evidence from the national smart city pilot policy

This paper investigates the impact of China's national smart city pilot (SCP) policy on employment pressure using city-level and firm-level panel data. The study employs a difference-in-differences model, revealing that SCP significantly reduces employment pressure in pilot cities. The mechanism involves configuration optimization, technological upgrading, siphoning effects, factor substitution, and efficiency gains, ultimately promoting urban economic agglomeration, industrial structure transformation, and regional innovation. Heterogeneous effects are observed across cities, firms, and worker education levels. Policy implications for developing countries are discussed.

Xiao Ling, Zhangwei Luo, Yanchao Feng, Xun Liu, Yue Gao