How is artificial intelligence shaping the labor demand of firms? ——evidence from text-mining analysis of listed companies

Abstract

Amid rising concerns over AI-driven technological unemployment, this study addresses the lack of firm-level evidence by analyzing how artificial intelligence (AI) adoption shapes employment dynamics in China. A comprehensive AI adoption index is constructed using novel text-mining and machine-learning techniques applied to annual reports of Chinese A-share listed companies from 2007 through 2023. The analysis reveals that AI intensity boosts productivity and operational competitiveness, which in turn prompts firm expansion and increases overall labor demand. Yet aggregate growth masks a pronounced shift toward high-skill occupations, producing a skill-biased unipolarization of labor demand. Input–output analysis further shows that AI penetration in upstream industries exacerbates this polarization in downstream sectors. Policy evaluation indicates that government interventions, especially in technology-intensive firms, dampen the labor-market disruptions associated with AI, with the strongest stabilizing effects observed in regions featuring rigorous tax enforcement and low market segmentation. Threshold-effect tests uncover a nonlinear pattern of rising marginal impacts of AI on labor demand. The employment-enhancing benefits of AI are most evident in state-owned enterprises, large firms, and capital-and-technology-intensive industries. These findings offer fresh microeconomic insights into the employment consequences of AI and provide guidance for labor market governance, industrial upgrading, and human capital development in the digital era.