Automated machines and the labor wage gap

This paper analyzes how the increase in the proportion of automated machines to general capital inputs affects the wage gap of the labor force complementary to the two types of capital, the general equilibrium model and constant elasticity of substitution production function are introduced and the impact mechanism is explored using a task-based model. Data for listed Chinese manufacturing companies from 2012 to 2020 is used and a double fixed effects model is invoked for empirical testing. The findings show that (1) a rise in the proportion of automated machines to general capital inputs increases the wage gap of labor complementary to automated machine capital and general capital, and a rise in the proportion of demand for both types of labor complementary to automated machines and general capital is an influential mechanism; (2) the productivity-enhancing effect suppresses the widening of the wage gap between the two types of labor; and (3) the results of heterogeneity analysis show that an increase in automated machine inputs among non-state-owned manufacturing firms and technology-intensive firms widens the labor wage gap. This paper makes a contribution to both theoretical and empirical analysis and provides references for the alleviation of the labor wage gap.