The impact of digital transformation on the employment structure in middle-income countries

The digital economy has become a key driver of economic growth in middle-income countries. Using panel data analysis with fixed effects and instrumental variable approaches on Chinese A-share listed companies (2013–2023), this study examines how enterprise digital transformation affects labour demand. Results show that digital transformation increases demand for technical, financial, and sales roles while reducing production positions, yielding a net positive effect on overall employment. This impact stems from enhanced productivity, improved business performance, and expanded operational scope. The effect is stronger in non-state-owned firms, firms with high cost-shifting capabilities, high-tech/service sectors, and regions with robust information infrastructure and intellectual property protection. Digital transformation also increases labour income share by optimising workforce structure and alleviating financing constraints. This study uniquely integrates firm-level heterogeneity, spillover effects, and income distribution impacts using a multidimensional digital transformation index, advancing beyond prior regional/industry-level analyses. Findings offer strategic insights for employment stabilisation and equitable growth in middle-income economies.