How Does Digital Economy Affects Informal Employment?

With the wide application of digital technology and its deep integration with various economic operation modes,digital economy is playing an increasingly important role in leading economic growth.On the other hand,informal employment usually refers to the type of employment that has not signed a labor contract,or has signed a labor contract but does not enjoy basic social security.China’s labor market has formed a large scale of informal employment.Technological change often has a significant impact on the labor market and the employment choices of labor force,so it is necessary to consider the digital economy as an important factor when studying about employment.Based on this,this article synthesizes a number of digital economy indicators,and uses principal component analysis(pca)to build digital economic index at provincial level.Matched with China Family Panel Studies,and comprehensively using Probit model,linear probability model,instrumental variable method,mediation effect analysis,this article studies the impact of digital economy on informal employment and its mechanism from the micro level,and further tests the heterogeneity.The study finds that digital economy has a significant negative impact on informal employment,and in terms of the influence mechanism,digital economy reduces the probability of labor force engaging in informal employment by reducing information asymmetry and improving workers’ skills.After considering the internal heterogeneity of informal employment,we find that digital economy significantly inhibits the upper tier of informal employment,but has little effect on the lower tier of informal employment.The heterogeneity analysis of different labor groups shows that the digital economy has a higher negative effect on informal employment of male labor force than that of female labor force.Digital economy significantly reduces the probability of prime workforce engaging informal employment,but it has little effect on the informal employment choice of the young and the elderly workforce.Digital economy significantly reduced the probability of non-agricultural household labor in town engaging in informal employment,but because of household register discrimination,digital economy has little impact on the informal employment choices of urban migrant laborers;Digital economy promote rural migrant labor force engaging in informal employment,but has little impact on local rural labor force engaging in informal employment.This paper suggests that China is supposed to pay close attention to the impact of digital economy on the labor market and employment,and pay more attention to the informal employment market in the process of promoting the construction of digital economy.The government should give informal employment a reasonable market position and intervene it reasonably;The government should pay attention to the positive externality of digital economy,promote the construction of the Internet to be universal and inclusive,and promote the construction and supervision of employment service platform;The government shall establish and improve the vocational training system to meet the needs of the industrial upgrading under the digital economy era.