This paper investigates the role of the internet
technology in explaining the process of employment structural transformation
under background of “Internet Plus” in China. We develop an employment
structural transformation model which is impacted by the substitution effect
and pervasiveness effect of internet technology, and show that the sectoral
reallocation of employment out of agriculture and manufacturing into services
when the substitution between manufacturing and service goods is too elastic
and the internet technology penetration to total factor productivity of
services is greater than the penetration of manufacturing. Our further
empirical analysis confirms the conclusion deduced by the model. These results
verify the “Internet Plus” plan can promote the productivity and accelerate the
employment structural transformation and upgrading in China.
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