The Role of the Internet Technology in the Employment Structural Transformation under Background of “Internet Plus” in China

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.