Labor substitution effect of artificial intelligence in the era of population aging: evidence from panel data across countries and panel data at provincial level in China

CHEN Qiulin1 XU Duo2 ZHOU Yi3

(1.Institute of Population and Labor Economics, Chinese Academy of Social Sciences)
(2.National School of Development, Peking University)
(3.Center for Social Research, Peking University)

【Abstract】Based on panel data across countries and panel data at provincial level in China, this study explores how population aging induces the application of artificial intelligence (AI) and how the application of AI affects economic growth with the two-stage least squares model. It investigates whether the application of AI substitutes labor force, and if yes, how such a substitution effect works. The results show that, the shortage of labor force caused by population aging would push an economy to apply more AI in production. Population aging is conductive to the development of AI. The application of AI has positive effects on local gross production and hence partially offsets the negative impact of population aging on economic growth. AI plays an important role in reacting to population aging. The development of AI is induced innovation driven by population aging, thus it is the complementary substitution for labor force rather than the crowding-out substitution. With these mechanisms, AI is expected to contribute greatly to the economy in the era of population aging.

【Keywords】 aging; artificial intelligence; intelligent production; substitution effect;


【Funds】 Guanghua Thought Leadership Platform of Beijing University.

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    [1]. ① Uhlmann et al. (2017) proposed in the discussion on German Industry 4.0 that intelligent production should be understood as a production system based on the cognitive ability (or intelligence) of machines. The so-called intelligent production refers to the cooperation between people and machines in a more complex and digitized form in a distributed industrial production environment. Different from the traditional industrial production mode, the man-machine cooperation in intelligent production adopts a data-driven mode based on cyber-physical systems and Internet. [^Back]

    [2]. ① According to the definition of IFR, industrial intelligent robots are automatically controlled, repeatedly programmable, and multi-purpose operators that can be programmed on three or more axes and can be fixed in place or moved in intelligent production applications. [^Back]

    [3]. ② The 14 countries are Brazil, Germany, France, the Republic of Korea, Canada, the United States, Mexico, Japan, Thailand, Spain, Italy, India, the United Kingdom and China. [^Back]

    [4]. ① [^Back]

    [5]. ② Since it is temporarily difficult to obtain accurate installation data of industrial intelligent robots in various regions, the number of robot integration enterprises in various provinces is used as the proxy variable. Enterprises need robot integration enterprises to provide installation and maintenance services when using industrial intelligent robots. The number of robot integration enterprises in a region can reflect the robot usage in that region. [^Back]

    [6]. ① The major industries in this database can be divided into: agriculture, forestry, animal husbandry and fishery; mining; food, beverage and tobacco industry; clothing and leather products; wood products (including furniture); publishing and printing of paper products; plastics and chemicals; metals; electronics; automobiles; other transportation equipment; all other manufacturing branches; water and electricity supply; construction; education and research and development; and other non-manufacturing industries. [^Back]

    [7]. ① From March 2017 to July 2018, 26 countries and regions including Canada, Japan, the United States, the European Union and Chinese Taiwan successively announced their respective AI strategies. [^Back]

    [8]. Artificial Intelligence Technology Strategy. [^Back]

    [9]. ③ [^Back]


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This Article


CN: 11-1043/C

Vol , No. 06, Pages 30-42+126-127

December 2018


Article Outline


  • 1 Research background
  • 2 Empirical hypothesis
  • 3 Aging driving intelligent production: international experience
  • 4 Intelligent production driving economic growth: evidence from China
  • 5 Conclusion and discussion
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