Research on the influence mechanism of the digital economy on the employment of the young elderly in China

Xiaoxia Zhang1,2, Nedospasova O.P.1
1 Tomsk State University
2 Ningde Normal University

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Экономика труда (РИНЦ, ВАК)
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Том 10, Номер 4 (Апрель 2023)

Цитировать:
Xiaoxia Zhang, Nedospasova O.P. Research on the influence mechanism of the digital economy on the employment of the young elderly in China // Экономика труда. – 2023. – Том 10. – № 4. – С. 543-556. – doi: 10.18334/et.10.4.117586.

Эта статья проиндексирована РИНЦ, см. https://elibrary.ru/item.asp?id=52264002

Аннотация:
The relevance of the topic is associated with the acceleration of global population aging. The authors focused on the problems of the modern labor market in China, due to the increase in average life expectancy and the growing presence of young elderly people (citizens aged 55 to 70 years). Based on data on China, a statistical analysis of the mechanism of the impact of the development of the digital economy on the employment of young elderly people was carried out. Based on the results of the analysis, conclusions were drawn about the main directions of transformation of the structure of employment of young older people, offering new jobs for them, introducing flexible forms of employment for young older people, and overcoming barriers to their employment in new jobs. It concludes with recommendations for promoting effective human resource development for the young elderly through four-way linkages between government, businesses, families, and citizens themselves. The article might be interested to a wide range of readers wandered about the current trends for labor market.

Ключевые слова: digital economy, young elderly, human resources, employment structure, labor economy, labor participation

Финансирование:
This research was carried out under the project of the Chinese National Foundation for Social Sciences (No. 22BJY045).

JEL-классификация: J21, J24, J26



Introduction

Since 1982, when the United Nations first convened the World Assembly on Ageing, the number and proportion of the young elderly in almost every country in the world is increasing day by day and population aging has become one of the most important social trends of the 21st century. According to United Nations Population Division statistics, by 2050, one in six people worldwide will be aged 65 years or older (16%), compared to 11 (9%) in 2019. Moreover, population aging not only has a significant impact on almost all macro areas such as labor markets、social security, which in turn leads to financial and political pressures in many countries in areas such as public health, pensions, and social security [1].

At the same time, with the extensive and in-depth use of technologies such as the Internet, big data, and artificial intelligence, the development model of major countries in the world is changing from an industrial economy to a digital economy. From a global perspective, on the one hand, the digital economy has become an important engine for the world's economic recovery. The widespread application of the digital Internet has not only improved the transparency of information in the labor market [2]; it has also had a significant impact on the employment structure, promoting a change in the division of labor and employment structure in society and increasing a large number of jobs related to the digital economy [3]. On the other hand, the rapid development of the digital economy has brought about a 'three-tier digital divide' [4], [5] and created new social problems such as digital poverty and digital inequality [6], [7]. Among these, the phenomenon of the digital divide among the elderly is more pronounced in most countries [8] and is particularly prominent in developing countries [9].

The digital divide significantly affects the well-being and mental health of the young elderly [10], [11], [12], which in turn affects their participation in social activities [13]. So, in the face of the lack of labor supply due to an aging population and the disincentive of the digital divide to the employment of the young elderly, how can the labor resources of the young elderly be developed? The authors argue that identifying the mechanisms by which the digital economy affects the employment of the young elderly is a prerequisite for the development of relevant policies.

Literature Review

Digital technology has a positive impact on employment. Bowles (2014) estimated that about 54% of jobs in 28 EU countries will be affected by technological progress [14]. The empirical analysis of Weber et al. (2016) shows that economic 4.0 will accelerate the transformation of German service enterprises, and the change in work will be much faster than the total number of employees. While creating jobs, it also leads to the disappearance of some jobs and puts forward higher requirements for the skills of the labor force [15]. Degryse (2016) argues that digitalization not only promotes significant changes in industrial structure and jobs but also enables social movements or trade union organizations to successfully use digital technology to safeguard and defend the interests and rights of workers [16]. The results of Eichhorst et al. (2017) showed that there was no indication that digitization would lead to mass unemployment. On the contrary, employment and man-hour workload in Germany performed very strongly [17]. Graham's (2017) research shows that digital platforms are becoming an important source of livelihood for workers [18]. Rani's ( 2020 )survey shows that the flexible characteristics of digital platforms have a positive impact on workers ' access to tasks, compensation, and working hours [19].

However, some scholars have also found the negative impact of digital economy development on employment. Piasna et al. (2017) believed that the promotion and wide application of digital technology have made significant changes in occupational structure, workplace and time, and occupational patterns, and brought pressure to traditional employment relationships [20]. Acemoglu (2018) also believes that the demand for workers' skills in industrial digitization is increasing, and the 'polarization' employment trend of increasing demand for high skills and decreasing demand for low skills will become more prominent [21] t. A study by Vasilescu et al. (2020) shows that digitally disadvantaged groups who are older, less educated, physically or not working, have relatively low-income levels, and rarely use the Internet are very afraid that robots will take their jobs [22]. Hilal (2021) et al.have shown that basic IT skills increase the probability of employment, but senior IT skills have no significant relationship with higher employment rates [23]. The empirical results of Bousrih et al. (2022) show that ICT has a negative and significant impact on employment in GCC countries, while it has a positive and significant impact on employment in major industrial sectors in developed countries. They also found that the gap was mainly due to the lack of skilled digital workers in GCC countries compared with developed countries [24].

In summary, scholars have shown that digital technologies have not led to a huge wave of unemployment, although they have led to significant changes in labor patterns, place, and time of work. Instead, the digital economy has created a significant number of new jobs that are based on digital platforms. However, these new jobs also place greater demands on the digital literacy of workers, which may lead to new employment and income inequalities between countries, age groups, and genders.

The young elderly (55-70 years old) as a group with working ability and working time. With the rapid development of digital information, Katrin (2006)、Biagi et al. (2011)、Lv et al. (2020) [25 - 27] believe that the mastery and application of Internet information technology has a positive effect on the employment of the young elderly. But Li et al (2021) believe that it will reduce the employment probability of the elderly [28]. What is the impact of the drastic changes in the labor market brought about by the digital economy on the employment of the young elderly? To answer this question, the author takes China as an example to analyze in detail the influence mechanism of the digital economy on the employment of the young elderly in China in the second part of the paper.

Analysis of the mechanism of the impact of the digital economy on the employment of the young elderly in China

Historical experience shows that every scientific and technological revolution has brought about tremendous changes in industrial structure and employment structures. In recent years, the digital economy model based on digital technologies such as the Internet and artificial intelligence has developed rapidly, bringing profound changes to the employment field, employment position, employment model, and employment threshold of the young elderly.

(1) The digital economy has expanded the field of employment for the young elderly

In today's world, digital technology transforms productivity and innovation models through data science, changes the global economic competition pattern, promotes the rapid development of the digital economy, and then changes the employment structure. China's macro data show that, the top four digital talent demand industries are the Internet information technology industry, manufacturing industry, financial industry, and consumer industry [29]. The above data show that under the iterative evolution and diffusion of digital technology, digital technology jobs have not only become popular employment areas, but also led to a significant increase in the demand for digital technology jobs in manufacturing, finance, and consumption industries, and also derived many non-technical jobs. According to data from the Ministry of Human Resources and Social Security of China, from 2019 to 2022, a total of 74 new occupations in 5 batches were released, of which 40 new occupations, such as artificial intelligence engineering and technical personnel, intelligent manufacturing engineering and technical personnel, virtual reality engineering and technical personnel, are directly related to digital technology, accounting for about 54% of the total number of new jobs [30]. In addition, information technology such as the Internet has spawned new forms of employment and opened up new employment spaces for the elderly. Its flexibility has broken through the work restrictions of age, geography, and other factors, making employment opportunities such as property management, taxation, auditing, mechanical design, pension services, and family education flood the elderly and increase the labor participation rate of the younger elderly. Therefore, the change in employment structure brought by digital technology can expand the employment field of the young elderly to a large extent.

(2) Digital economy provides diversified employment positions for the young elderly

Compared to the simple, closed economic model of the industrial era, the digital economy has broken down the boundaries of time and space and blurred the borders between industries. A computer or a mobile phone can become a work scenario, and changes in the way labor is performed have given rise to digital professions. For example, there are relatively simple physical jobs such as picking up and dropping off children, cleaning, data entry, couriers, takeaway riders, and internet taxi drivers, as well as complex cerebral jobs in design, programming, data analysis, software design, translation, and business. From the macro level, the scale of flexible employment in China reached about 200 million people in 2021, and the market size of the casual labor economy has exceeded 876 billion RMB, and it is expected that the market size of China's casual labor economy will exceed 1 trillion RMB in 2022, and it is expected that the market size of China's casual labor economy will reach about 2 trillion RMB in 2025 [31]. From the perspective of enterprises, 61.14% of enterprises in China are using flexible labor in 2021, and enterprises as a whole tend to expand the scale of flexible labor [32]. The rapid development of the digital economy and the increase in the scale of flexible employment in enterprises has led to a more diverse and flexible range of jobs for the young and elderly.

(3) The digital economy has promoted the transformation of the employment model of the young elderly

The digital economy is gradually breaking the constraints of jobs on time and space by fully accessing cross-scene, cross-time, and cross-regional digital contacts and optimizing the allocation of aggregated resources. Especially since the rapid spread of COVID-19 in the world, digital collaborative office software has maintained the normal operation and business development of enterprises due to its high efficiency and flexible working mode across time and space, which has promoted the digital transformation of workers' working mode. At the same time, in the past five years, the number of elderly Internet users in China has increased year after year. By the end of December 2021, the proportion of elderly Internet users reached 119.67 million, accounting for 11.5 % of all Internet users in China. The use of instant messaging, government services, online payment, and other networks by elderly Internet users is also increasing [33]. The above data on the use of the Internet by the elderly shows that most elderly people have quickly integrated into the digital society, and the widespread use of Internet software has also enabled the young elderly to adapt to significant changes in the way they work under the digital economy model.

(4) The digital economy has lowered the barriers to employment threshold for the young elderly

As digital technologies such as artificial intelligence are being used in several industries, the continued intelligence of machine capabilities is releasing some of the physical and mental loads of humans, and traditional barriers to employment are being broken down, allowing the work content of traditional jobs to be increasingly aided by the intelligent computing of centralized back-office systems, further refining the division of labor and lowering the employment threshold for many jobs. According to statistics, China's digital economy jobs have strong demand for workers with low and medium education backgrounds, of which 34.4% have high school education and below, 63.9% have junior college and undergraduate education, and only 1.7% have master's and doctoral requirements. Moreover, digital economy jobs have relatively low requirements for the number of years of work experience, and 74.8% of the recruitment information requires a working life of 2 years or less [34]. Moreover, China's Internet job postings in 2020 showed a 32.4% year-on-year increase in the number of middle-aged and senior job seekers aged 50 and above who submitted their CVs via Internet platforms, a growth rate more than four times that of job seekers under 35 years old [35]. It is thus clear that the digital economy has led to a further refinement of the social division of labor, with some companies requiring a certain degree of lower education and work experience, which has lowered the barriers to employment for lower-aged young elderly, and in turn, increased the chances of their labor force participation.

In general, with the rapid iterative update of digital technology, the development speed of the digital economy is also changing with each passing day. It not only promotes the change of employment structure, not only breeds more employment positions, but also makes the employment model of workers more flexible and diverse, and the employment threshold of some new jobs is also reduced (Fig. 1). Therefore, in the context of population aging and the digital economy, the status of human resources for the young elderly is also more prominent, and it is imperative to accelerate its development.

KSO_WM_BEAUTIFY_FLAG=#wm#&KSO_WM_TAG_VERSION=1.0&KSO_WM_TEMPLATE_CATEGORY=wpsdiag&KSO_WM_TEMPLATE_INDEX=20161011&KSO_WM_UNIT_DIAGRAM_SCHEMECOLOR_ID=defaultTheme2013&KSO_WM_UNIT_ID=wpsdiag20161011_3*i*1&KSO_WM_UNIT_TYPE=i

Source: Composed by authors

Fig. 1: Mechanisms of the impact of the digital economy on the employment of the young elderly

Conclusion

With the deepening population aging, it is not enough to rely on the government to introduce a delayed retirement policy to alleviate a series of pressures brought by population aging. It requires the government, enterprises, families, and the elderly to achieve the effective development of the young elderly human resources, and then make up for the dilemma of shrinking labor resources.

For the Government

(1) Build an active aging-friendly environment and provide policy and service support

The first is to establish the concept of active aging, positively publicize the role and value of the young elderly, regard them as experienced, low-cost, and stable human resources, eliminate the wrong perception that the elderly are social burdens or 'burdens', and create a healthy concept of active employment for the young elderly in society. Second, improve policy support and institutional supervision on digital equality, anti-discrimination, digital relief, and lifelong education for the young elderly, and clear the digital divide for the re-employment of the young elderly. Third, establish a silver-haired talent service center to provide career introduction, vocational skills training, and innovation and entrepreneurship guidance services for the young elderly with labor willingness.

(2) Promote technical aging transformation and provide employment technical support

The government should further strengthen the top-level design, formulate the medium and long-term goal planning of technology aging, clarify the key construction direction and development stage, increase the supporting capital investment, and promote the public digital platform and service system at all levels to take the lead in completing the aging transformation; the government should formulate the general requirements of the standard of intelligent technology for the elderly, take industrial guidance as the starting point, and promote the application of intelligent technology for the elderly in enterprises, to provide technical support for the reemployment of the young elderly.

(3) Create smart learning scenarios and provide digital skills support

From the perspective of lifelong learning, a digital literacy education framework is constructed to form a government-led, multi-party participation, and results-sharing digital literacy education mechanism for the elderly. Through experiential learning, simulation applications, and experience exchanges, the elderly are guided to skillfully cope with various intelligent life scenarios, creating conditions for the elderly to achieve ' digital accessibility ' and laying a digital skills foundation for the young elderly to better achieve employment.

(4) Strengthen health care services, enhance re-employment physical security

First, it is necessary to further expand the coverage of basic medical insurance, as soon as possible to achieve urban and rural residents' medical insurance should be guaranteed, encourage individuals and enterprises to purchase other forms of supplementary insurance, including commercial health insurance, and improve the multi-level medical security system. The second is to optimize medical resources and strengthen medical facilities for aging. The third is to establish an 'Internet + medical' health consulting service system and smooth the information channels for elderly health consulting.

For enterprises

(1) Establish a new salary payment mechanism

Enterprises can implement the salary peak mechanism, which stipulates that the salary of the young elderly employees will not increase with the increase of working age after reaching the highest value before retirement, to reduce the labor cost of enterprises and make enterprises more willing to provide jobs for the young elderly.

(2) Improve the working environment of the young elderly

Enterprises should create a more comfortable and safe working environment for the elderly to work more smoothly. According to the characteristics and advantages of the elderly, such as rich experience and strong compressive ability, we scientifically plan posts, arrange easy and appropriate work such as management posts, office posts, and training posts, and maximize the actual value of the young elderly.

For the family

The family should rationally view the employment of the young elderly, and fully respect and affirm the employment willingness of the young elderly in the family. At the same time, improve family digital feedback and improve the digital participation ability of the young elderly. The younger generation actively transmits digital thinking, digital skills, and network security awareness to the young elderly, driving the young elderly to better adapt to digital life and work.

For the elderly

In the digital era of the 'Internet of Everything', learning Internet use skills is the general trend. The young elderly should learn to calm their mind, cross the inner 'digital divide', practice the concept of lifelong learning, constantly improve their digital literacy, and fully integrate into the digital economy.


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