Capital Informationization And The Changing Labor Demand

The past few decades have witnessed several significant changes both in quantity and structure of labor input all around the world.More specifically,differing from capital input,the total labor input has showed a downward trend year by year,which has also been reflected in labor income share.Meanwhile,as for the labor skill structure,the relative input for skilled labor has evidently increased these years,accompanied by a sharp rise in skill premium.The same variation trend on input quantity and price indicates that the changes of labor demand are caused by demand factors,rather than supply factors.The existing literatures tried to explain this phenomenon from technological changes channel,exploring the impacts of Skill-biased Technological Change(SBTC)on labor demand and wage inequality.But these technology-based studies couldn't present explanation for the source of SBTC and its influence path.In addition,the striking differences of the changing labor demand trend exist not only between courtries,but also between industries and firms,which is also ignored by most related research.Since last century,rapid development of semiconductor technology have lead to lower Information and Communication Technology(ICT)capital price,causing more ICT application in production and changing the traditional production style,which inevitably gave rise to variations in the proportion of different inputs.Therefore,the informationization effects on labor force and employment structure need to be investigated in depth.Accordingly,based on the perspective of informatization,from country,industry and firm level respectively,this paper aims to elaborate the question of ICT affecting production mode,which impacting on labor demand by putting labor demand quantity,labor income share,skilled labor relative demand and skill premium in a united analytic frame.Theoretical analysis shows that technological progress results in the decrease of the ICT capital price,causing the increase of ICT capital share in the total capital input which raises the marginal pruducts of capital,and further increasing the capital input and decreasing the labor input and labor income share,as well as increasing skilled labor input relative to unskilled labor and skill premium due to the smaller elasticity of substitution of capital and skilled labor than that of capital and unskilled labor.Furthermore,these effects reflect large differences between countries,industries and firms,which are affected at national information infrastructure,industrial ICT intensity and team-work degree,and firm' s utilization efficiency of ICT capital and its ICT intensity to a large extent.On this basis,empirical studies are conducted from country and industry level using cross-country and cross-industry data and from firm level using China's industrial enterprises data,which are consistent with the theoretical results.Then,we put forward some policy suggestions as follows.To start with,as a country with shortages of unskilled labor,China can strengthen the construction of ICT infrastructure and promote ICT industry competition in a bid to accelerate the informatization process,which not only benefits economic growth,but also contritutes to ease the contradiction of labor market and to alleviate the current problem of "shortage of migrant workers".Next,in view of the tendency of ICT impact on labor market,it is sensible to adapt to this situation through adjusting education and training policy for the government and holding a more rational career planning for individuals,which will avoid adverse impact of ICT for employment to a certain extent.Finally,the negative effects of labor demand caused by ICT can be offseted by measures of advancing marketization and anti-monopoly regulation within certain realms because the study also confirms that those effects will be amplified when the degree of competition is decreasing in regional or industrial level.The whole text contains six parts.The first chapter,introduction,states the changing trends and characteristics of labor and capital input in recent several decades,introducing research background,importance,main idea and the structure of this paper.Chapter 2 is literature review,which is the summaries and commentaris on the previous studies on the relate studies.In Chapter 3 we build a theoretical model to analyze the microscopic impact mechanism of ICT on labor demand from country,industry and firm level in detail.Throuth cross-country and cross-industry time series data and China's industrial firm data,empirical studies are conducted from country and industry level in Chapter 4 and from firm level in Chapter 5.Chapter 6,the last chapter,summarizes the full dissertation and presents policy recommendations and possible research directions in the future.