To what extent do technological advancements and Government policy interventions contribute to unemployment in China?
DOI:
https://doi.org/10.61173/rqrkdy06Keywords:
China’s Unemployment Rate, Technological Advancements, Government Policy Intervention, Multiple Regression AnalysisAbstract
This study empirically examines the impacts of technological advancements and government policy interventions on China’s unemployment during 2015–2025, using Pearson correlation analysis and multiple linear regression analysis. It identifies a highly significant positive correlation between general public expenditure as a GDP share and China’s unemployment rate, with clear reverse causality. However, national average minimum wage and R&D expenditure’s GDP share show no statistical impact on overall unemployment, due to regional wage heterogeneity, offset R&D job displacement and creation, and long R&D employment lags. Limited by national aggregated data, incomplete variable measurement and a short empirical horizon, the study still provides evidencebased insights for China’s targeted employment policies and balancing technological progress, policy regulation and employment stability.
References
[1] Andrea Caceres-Santamaria. (2024). Exploring the Dynamics of Unemployment. The Federal Reserve Bank of St. Louis. Retrieved May 3, 2024, from https://www.stlouisfed.org/ publications/page-one-economics/2024/05/03/exploring-thedynamics-of-unemployment.
[2] Greg Daugherty. (2025). Exploring the Dynamics of Unemployment. Investopedia. Retrieved January 1, 2025, from https://www.investopedia.com/articles/personal-finance/013015/ how-minimum-wage-impacts-unemployment.asp.
[3] Serdar Ozkan and Nicholas Sullivan. (2025). Is AI contributing to rising unemployment? The Federal Reserve Bank of St. Louis. Evidence from occupational variation. Retrieved August 26, 2025, from https://www.stlouisfed.org/on-theeconomy/2025/aug/is-ai-contributing-unemployment-evidenceoccupational-variation.
[4] Melline Somers, Angelos Theodorakopoulos, and Kerstin Hötte. (2022). The fear of technology-driven unemployment and its empirical base. VoxEU. Retrieved June 22, 2022, from https:// cepr.org/voxeu/columns/fear-technology-driven-unemploymentand-its-empirical-base.
[5] Yale University’s Budget Lab. (2025). Evaluating the impact of AI on the labor market: September CPS update. https:// budgetlab.yale.edu/research/evaluating-impact-ai-labor-marketseptember-cps-update.
[6] LexChina. (2025). Navigating China’s Shifting Labor Cost Landscape: An October 2025 Minimum Wage Update. Retrieved October 21, 2025, from https://lexchina.org/navigating-chinasshifting-labor-cost-landscape-an-october-2025-minimum-wageupdate/.
[7] Yan Cui, Jing Ruan, and Qingqing Huo. (2024). Frontiers in Artificial Intelligence. “Machine replacement” or “job creation”: How does artificial intelligence impact employment patterns in China’s manufacturing industry? doi:10.3389/ frai.2024.1337264.
[8] Jianmin Liu, Yifeng Shen, Wenye Fan, and Xiya WuIndustrial. (2024). Technological advance and the employment demand for China’s labour force: Micro evidence from labour hiring in companies. PLOS ONE. doi: 10.1371/ journal.pone.0307564.
[9] Yi Huang. (2024). Boosting consumption in China: The Effectiveness of Minimum Wages article. PLOS ONE. Retrieved November 7, 2024, from https://voxdev.org/topic/labourmarkets/boosting-consumption-china-effectiveness-minimumwages.
[10] Prakash Loungani. (2014). Does Raising the Minimum Wage Hurt Employment? Evidence from China. Retrieved October 23, 2014, from https://www.imf.org/en/blogs/articles/2014/10/23/ does-raising-the-minimum-wage-hurt-employment-evidencefrom-china.
[11] Global Economics Science. (2023). The impact of technological advancement on unemployment in Turkey. http:// ojs.wiserpub.com/index.php/GES/.
[12] ShodhSamajik: Journal of Social Studies. (2025). Technology and AI -impact on country’s growth and unemployment. doi:10.29121/ShodhSamajik.v1.i1.2024.3.
[13] International Monetary Fund (IMF). (2018). Youth minimum wages and youth employment. doi:10.1186/s40173-018-0098-4.
[14] David Neumark. (2015). The effects of minimum wages on employment. Federal Reserve Bank of San Francisco. Retrieved December 21, 2015, from https://www.frbsf.org/wp-content/ uploads/el2015-37.pdf.
[15] Tony Fang and Carl Lin. (2015). Minimum wages and Dean&Francis ISSN 2959-6149 employment in China. IZA Discussion Paper. Retrieved November 27, 2015, from https://docs.iza.org/dp7813.pdf.
[16] Global Economics Science. (2018). Will this time be different? A review of the literature on the Impact of Artificial Intelligence on Employment, Incomes and Growth. https://www. econstor.eu/bitstream/10419/202236/1/jrc-dewp201808.pdf.
[17] Qian Zhou. (2026). China Briefing. China Minimum Wage Standards 2026. Retrieved January 22, 2026, fromhttps://www. china-briefing.com/news/minimum-wages-china.
[18] Doc’s Research Glossary. (2024). Multiple regression analysis. https://docmckee.com/cj/docs-research-glossary/ multiple-regression-analysis-definition/#google_vignette.
[19] Universitat Jaume I, Tallinn University of Technology and Eesti Pank. (2020). Is government consumption really crowding out investment? Evidence from the EU28. Retrieved May, 2022, from https://www.doctreballeco.uji.es/wpficheros/Cuestas_et_ al_05_2020.pdf.
[20] U.S. Chamber of Commerce. (2022). Data Deep Dive: How Government Benefits Programs Are Contributing to the Labor Shortage. Retrieved September 29, 2022, from https://www. uschamber.com/workforce/data-deep-dive-how-governmentbenefits-programs-are-contributing-to-the-labor-shortage.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 by the authors.
This work is licensed under a Creative Commons Attribution 4.0 International License.
