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<p>The convergence of economics and digitalization has transformed labor markets across the world. It poses new opportunities as well as challenges relating to adaptive and inclusive workforces. Based on the Marxist political economy view, this study utilizes panel data from 31 Chinese provinces over the period 2001–2020 and applies Feasible Generalized Least Squares (FGLS) regression method to evaluate the differential impacts of digitalization on four labor categories: unskilled, low-skilled, medium-skilled, and high-skilled workers. The results indicate that digitalization has a disproportionately negative impact on unskilled and low-skilled workers, increasing their vulnerability to job displacement. In contrast, medium- and high-skilled workers benefit significantly from digital adoption, with medium-skilled labor showing the most pronounced positive outcomes due to their greater adaptability to evolving technological demands. Furthermore, subgroup analysis demonstrates that provinces with stronger capital investment and higher levels of final consumption experience more favorable outcomes for skilled labor. These findings highlight regional economic infrastructure and the role of local economics in mediating how the outcomes of digital transformations differ. This study recommends policy actions relating to Sustainable Development Goals (SDG) 8, decent work and economic growth; and SDG 9, industry, innovation, and infrastructure; namely targeted investments in technical education, reskilling, and development in digital literacy to support an inclusive and sustainable labor market transition, and, to promote equitable access to digital opportunities to enhance maximization of socio-economic benefits through digitalization in an economically, socially, and environmentally sustainable way.</p>

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Assessing the socio-economic and sustainable development impacts of economic digitalization on skill-based labor markets in China

  • 期刊论文

  • 发表日期：

    2026年1月7日

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  • Yuxia Li,
  • Rabia Rafique

摘要

The convergence of economics and digitalization has transformed labor markets across the world. It poses new opportunities as well as challenges relating to adaptive and inclusive workforces. Based on the Marxist political economy view, this study utilizes panel data from 31 Chinese provinces over the period 2001–2020 and applies Feasible Generalized Least Squares (FGLS) regression method to evaluate the differential impacts of digitalization on four labor categories: unskilled, low-skilled, medium-skilled, and high-skilled workers. The results indicate that digitalization has a disproportionately negative impact on unskilled and low-skilled workers, increasing their vulnerability to job displacement. In contrast, medium- and high-skilled workers benefit significantly from digital adoption, with medium-skilled labor showing the most pronounced positive outcomes due to their greater adaptability to evolving technological demands. Furthermore, subgroup analysis demonstrates that provinces with stronger capital investment and higher levels of final consumption experience more favorable outcomes for skilled labor. These findings highlight regional economic infrastructure and the role of local economics in mediating how the outcomes of digital transformations differ. This study recommends policy actions relating to Sustainable Development Goals (SDG) 8, decent work and economic growth; and SDG 9, industry, innovation, and infrastructure; namely targeted investments in technical education, reskilling, and development in digital literacy to support an inclusive and sustainable labor market transition, and, to promote equitable access to digital opportunities to enhance maximization of socio-economic benefits through digitalization in an economically, socially, and environmentally sustainable way.