Artificial Intelligence and Labor Income Share: Evidence From China's Urban Data

This paper constructs a theoretical model of the impact of artificial intelligence on labor income share, empirically verifies it by using the panel data of 287 cities above prefecture level in China from 2005 to 2018, and deeply discusses the impact of the development of artificial intelligence on labor income share. The study found that the development of artificial intelligence is conducive to increasing the share of labor income by increasing the wage level. In the short term, due to the "Solow paradox", the development of artificial intelligence has no significant impact on the overall labor productivity; raising the wage level is an important mechanism for the development of artificial intelligence to increase the share of labor income. In the long run, with the development of artificial intelligence in promoting the increase of labor productivity, the effect of increasing the share of labor income by raising the wage level is offset by the gradual increase of labor productivity, resulting in no significant impact of the development of artificial intelligence on the share of labor income in the long run. Therefore, in order to promote AI to overcome Solow paradox and increase labor income share, it is necessary to improve the innovation and development system and mechanism of AI; promote the combination of IUR of AI; establish a complete long-term mechanism for wage growth and increase the share of labor income; improve the security system for the application of patent technologies related to artificial intelligence, accelerate the development of industrial intelligence, and improve labor productivity.