More Jobs, Wider Pay Gaps: China’s Open Data Economy Brings Growth with New Inequality

Open government data created jobs, raised business entry by 9.22% and improved productivity in China, particularly benefiting less-educated, production and sales workers. However, widening executive-worker pay gaps and declining employee benefits show that open-data expansion must be paired with labour protections, skills support and assistance for smaller firms.

An Asian Development Bank Economics Working Paper by researchers from Sichuan University, Xi'an Jiaotong University and ADB's Economic Research and Development Impact Department finds that open government data can create jobs, encourage new businesses and improve productivity in the People's Republic of China. However, it can also widen wage inequality, reduce employee benefits and increase labour disputes.

The study examined open-data platforms across 218 Chinese cities using business-registration records covering more than 70 million enterprises, information from listed companies between 2009 and 2022, and 1,678 labour-dispute cases. Its central message is clear: making government data available can support economic growth, but additional policies are required to ensure that workers and smaller businesses receive a fair share of the benefits.

When Government Data Becomes an Economic Asset

Public data accounts for more than 80% of China's total data resources, yet much of it remains underused. These records cover minimum wages, social insurance, recruitment, business credit, public procurement, industry statistics, legal assistance and other public services.

China's open-data expansion accelerated after 2015. By the end of 2023, more than 200 cities, representing over 60% of all Chinese cities, had introduced open-government-data initiatives. Public authorities had released more than 460,566 datasets. In Shanghai, public data had been accessed more than eight million times by the end of 2024, with businesses accounting for 32.36% of users and individuals for 22.49%.

Unlike automation, which may replace workers, public data can help employees perform their jobs more effectively. Businesses can use it to forecast demand, identify customers, understand regulations and plan production. Workers can access information about wages, vacancies, social protection and legal rights.

More Businesses and Jobs, but Not for Everyone

Open-data access increased employment within listed companies by approximately 1.81%. Based on average pre-policy employment of around 2,065 people in companies located in cities without open-data platforms, this was equivalent to roughly 37 additional jobs per firm.

The gains were concentrated among ordinary and less-educated workers. Employment increased by 3.3% for people with a high-school education or less, while undergraduate employment declined by 2.3%. No significant change was found among postgraduates. Production employment rose by 3.6% and sales jobs by 3%, whereas financial and technical positions recorded no meaningful change.

Open data also accelerated business turnover. New enterprise entry increased by 9.22%, while business exits rose by 6.34%. Compared with the study's baseline, this represented approximately 475 additional business entries and 220 closures.

The positive gap between entry and exit supported net employment growth. Public information reduced the cost of finding markets, understanding regulations and starting a business. At the same time, greater transparency exposed inefficient companies to stronger competition. Firms with stronger financial, digital, and analytical capabilities benefited more quickly, while less-prepared businesses risked being pushed out.

Productivity Gains Come with a Pay Gap

Employment increased across several industries, including utilities by 3.8%, information technology services by 2.7%, real estate by 2.4%, manufacturing by 2.1% and finance by 1.9%. Within manufacturing, employment rose by 3.2% in textiles, 3.1% in pharmaceuticals, 2.8% in agricultural processing, 2.6% in chemicals and 1.9% in papermaking.

The movement of labour and capital from exiting companies towards more productive businesses improved total factor productivity, labour allocation and revenue. This shows that open data can contribute to industrial development by helping firms understand demand, regulations, exports and supply-chain opportunities.

However, more jobs did not necessarily mean better jobs. Managerial wages increased by approximately 2.22%, while wages for ordinary workers weakened, although the decline was not statistically significant. The ratio of executive compensation to average employee pay rose by around 2.15%.

Spending on labour-union and employee-education funds declined by 1.87%, while welfare expenditure fell by 1.18%. These reductions can affect professional training, workplace protection, social security and other benefits that determine employment quality. Labour disputes increased by 0.87%, including a 0.68% rise in remuneration cases and a 0.22% increase in disputes over job adjustments.

Building a Fairer Open-Data Economy

Governments should measure the success of open data through employment quality, business survival and wage distribution—not simply the number of datasets released. Open-data policies should be supported by wage safeguards, social-security enforcement, stronger labour protections and accessible dispute-resolution systems.

Special assistance is needed for micro, small and medium-sized enterprises. Governments and development partners can provide shared data tools, affordable analytics, digital training, incubators and advisory services. This would prevent large companies with greater technical capacity from capturing most of the economic value.

International development institutions can support interoperable platforms, cybersecurity, privacy protection and data-quality standards. They can also finance workforce training and systems for monitoring job creation, productivity, wages, business closures and market concentration.

Private companies have opportunities in data analytics, compliance services, logistics, financial technology and market forecasting. However, businesses that respond to competition by cutting wages, training or welfare benefits could face litigation, reputational damage and workforce instability.

The study ultimately shows that public data can generate businesses, jobs and productivity, but openness alone cannot guarantee inclusive growth. Governments must combine digital infrastructure with labour protection and skills development so that data-driven progress benefits workers, entrepreneurs and established companies alike.