The influence of biased technical progress on employment scale of the circulation industry: Evidence from China

Abstract

As a leading industry in the national economy, circulation industry can not only guide production and consumption, but also play a vital role in absorbing employment. With the progress of science and technology, technical change has penetrated into the circulation industry of China, which has not only improved its development, but also affected its employment. This paper uses the standardized supply-side system approach to measure the biased technical progress of circulation industry in China and investigates the influence of the biased technical progress index on the employment scale of circulation industry in China with panel regression model. We find that the overall technical progress in China’s circulation industry during 2004–2018 is biased toward capital, and the elasticity of substitution between capital and labor is less than 1. We also find capital-biased technical progress in China’s circulation industry is negatively related to the overall employment scale of circulation industry. The heterogeneity analysis indicates that the employment of non-state-owned units in circulation industry is significantly negatively affected by capital-biased technical progress, while state-owned units doesn’t.