Can Artificial Intelligence Boost Employment in Service Industries? Empirical Analysis Based on China

Based on the provincial panel data of China during 2007-2020, this study examines the temporal and spatial dynamic characteristics of artificial intelligence (AI) development and service industry employment, using the fixed-effect model to analyze the influence mechanism of AI development on service industry employment. We analyzed the regional heterogeneity. The results revealed the following: (i) AI experts a direct and indirect impact on the service industry employment. The direct impact is manifested in the creation effect and substitution effect, while the indirect impact is manifested in the competition effect. These effects exert a positive and significant indigenous impact on the service industry employment: increasing the number of jobs, optimizing the employment structure, and increasing employment income; (ii) Subregional studies demonstrated that the impact of AI development on employment in services has regional heterogeneity, which is conducive to narrowing regional differences in services; (iii) Cross-industry studies reported that AI development has augmented cross-industry inflows of labor and increased job competition for medium-skilled labor. This study is utmost significance to improve the employment policy of China's service industry, optimize the training system of service talents, promote the upgrading of the service industry, and promote the synchronized development of the regional service industry.