The Impact of Robot Application on Labor Participation: Mechanisms and Empirical Evidence

Based on data from the China Labor Dynamics Survey for 2012, 2014, and 2016, combined with city-level data on the density of robot installations, this paper examines the impact of robot applications on individual labor market entry and exit decisions. The empirical results show that (1) for every 10% rise in robot application, an individual's labor force participation rate significantly increases by 2.31%, and the finding remains robust after a series of tests. (2) Mechanistic analyses show that robot application contribute to increasing employment, facilitating skills upgrading and matching, improving work conditions, optimizing worker status, and thus increasing individual workforce participation. (3) Heterogeneity analysis shows that the impact of robot application varies across different groups, with more significant effects on labor force participation for women, young and middle-aged people, individuals with good health, and individuals with low and high skills. Based on research findings, this paper suggests that China can unleash the potential labor force by promoting the development of robot application to alleviate the labor shortage caused by population aging and childlessness. At the same time, the government also needs to preempt the problem of unequal labor participation that may be triggered by the application of robots and promote the fair and healthy development of the labor market.