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Top1. Introduction
Digital technologies are rapidly transforming society, much of it driven by low-cost computing, the internet, and mobile connectivity. The large-scale and irreversible techno-economic transformation that has been occurring in China in recent decades is multifaceted. It thus provides an interesting case study for exploring the impact of Internet use in the context of a developing non-western environment. Up to June 30, 2018, the number of Chinese netizens reached 802 million, and the Internet penetration rate was 57.7 percent among its population (China Internet Network Information Center, 2018). Combined with the use of other Information and Communication Technologies (ICTs) such as personal computers and mobile devices, the rapid growth of Internet use in China may have a significant impact on the labor market.
Understanding the interplay between Internet technology and the labor market is important for evaluating whether additional scarce government resources should be allocated to expanding access to digital infrastructure. It is noteworthy that Internet access in rural and isolated areas is still too slow and expensive to be effectively used. Until 2018, Chinese urban netizens accounted for 72.7 percent of the urban population, while rural netizens accounted for only 36.5 percent. The digital gap between those people who have internet access and those who do not will need to be further investigated.
This paper contributes to three strands in the literature: the one that studies the impact of Internet technology on employment rate, the one on job polarization and wage inequality, and the one on sustainable employability. We describe its relation to these pieces of literature in turn briefly.
Firstly, recent theoretical literature has studied the impact of Internet use on the labor market, motivated by the economic consequences of underemployment. Within this literature, Atasoy (2013) explores the impact of the expansion of broadband Internet access from 1999 to 2007 on employment rate throughout the United States and finds that Internet access is associated with a 1.8 percentage point increase in the employment rate. Some other cross-sectional studies have shown that there are some measurable effects on productivity and efficiency (Goldfarb & Tucker, 2017), but the more critical long-run effects are beyond measurement.
Secondly, a rich literature has emphasized positive or negative effects of the digitalization of information or other forms of skill-biased technical change on wage distribution (Autor et al., 2013; Acemoglu et al., 2016), but little has been examined at an individual level. Numerous studies have attempted to explain the impact of the digital economy on job polarization (Collard-Wexler et al., 2015). None of these papers embed the analysis of the impact of technology on the labor market in a model of sustainable employability. Thus none of them delivers implications for expanding access to digital infrastructure or for enabling and incentivizing lifelong learning, which is a focus of this paper.
Finally, up to now, previous studies on human capital usually apply education or other traditional measures to assess the skill level of employees. However, in the current trend of the digital economy, dynamic factors are essential in measuring an individual’s capability, and additional effort should be devoted to analyzing those factors. The notion of employability and sustainable career provides relevant research frameworks to us, and these works have received increasing attention in scientific journals (e.g., Van der Heijde & Van der Heijden, 2006; Anseel, 2017). Our measurement of sustainable employability is consistent with theirs. However, among these works, no attempt has been made yet to examine the effect of external environment changes such as broadband network technology on employability, which is a major focus of our paper.
Digital technology can both provide opportunities and accentuate inequality. In order to understand the social and economic consequences brought about by broadband Internet, we need to understand the differences in professional skill accumulation between individuals, as well as their attitudes to changes in the workplace. In this contribution, we investigate the impact of Internet use on the labor market at the individual level, which are the most basic yet essential study units and targets of the current research.