The impact of biased technology on employment distribution and labor status in income distribution

Abstract

Purpose The purpose of this paper is to examine the effect of biased technology on employment distribution and labor status in income distribution of China. It also testifies a threshold effect of the capital per labor and employment distribution on labor status from biased technology. Design/methodology/approach This paper presents a normalized supply-side system of three equations to measure the bias of technology in China. Linear and threshold regressions approaches are applied over cross-province panel data to investigate the influence which biased technology has on labor status under different capital per labor and employment distribution regimes. Findings This paper empirically shows that technology has been mostly capital-biased in China. The regression results indicate that capital-biased technology impairs labor income status and tend to modify employment distribution and labor income between industries. Furthermore, it reveals the threshold effect of capital per labor and employment distribution on the relationship between biased technology and labor status. Originality/value This paper extends the literature by explaining labor status from the perspective of biased technology and the effect of inter-industry employment distribution in China. It further explores the asymmetric effect of biased technology on labor productivity and income, which promotes inter-industry labor mobility and modifies employment distribution. This paper highlights the implications of this explanation for labor relations and human resource management.