Can AI Fix Job Mismatch? Evidence from China’s Rapid Shift to Intelligent Technology

China’s rapid adoption of intelligent technology is not only transforming production but also helping workers find jobs that better match their education and skills, reducing widespread over-education. The evidence shows that by creating more high-skill jobs and upgrading labor demand, intelligent technology is improving skill matching—especially in advanced regions, services, and among women and older workers.

China is installing more industrial robots than any other country, rolling out artificial intelligence, smart manufacturing, and digital systems at breathtaking speed. Yet for years, this technological rise has coexisted with a stubborn labor market problem: millions of educated workers stuck in jobs that do not use their skills. A new study by economist Yue Han of the School of Economics and Management at Taiyuan Normal University, using nationally representative data from the Institute of Social Science Survey at Peking University, explores whether intelligent technology is finally helping to solve this mismatch. The findings suggest that, far from worsening the problem, intelligent technology is beginning to align workers’ education more closely with the jobs they hold.

How Intelligent Technology Changes Work

Intelligent technology does not affect all jobs in the same way. Machines and algorithms are especially good at taking over routine, repetitive tasks, basic assembly, sorting, and simple data processing. As these tasks disappear, many low-skill jobs shrink or vanish. At the same time, new jobs emerge that involve managing digital systems, analyzing data, designing processes, or delivering advanced services. These roles are harder to automate and usually require higher education and more complex skills.

In simple terms, intelligent technology removes some low-skill work while creating more high-skill work. This changes what employers are looking for. When more high-skill jobs exist, educated workers are less likely to accept positions below their qualifications and more likely to wait for jobs that actually fit their training.

Measuring Skills and Technology Together

To see whether this is happening in practice, the study combines two powerful data sources. On the worker side, it uses China Family Panel Studies surveys from 2014 to 2020, which ask people not only how much education they have, but also how much education they believe their job requires. This makes it possible to measure skill mismatch directly, by looking at the gap between education and job requirements.

On the technology side, the paper builds a detailed index of “industrial intelligence” for each Chinese province. This index goes beyond robot counts. It includes digital infrastructure, investment in intelligent equipment, high-tech industry output, innovation performance, and efficiency indicators. Together, these measures capture how deeply intelligent technology has been integrated into the economy.

What the Evidence Shows

The results are clear and easy to interpret. Provinces with higher levels of industrial intelligence show much better skill matching. As intelligent technology advances, the gap between workers’ education and what their jobs require becomes significantly smaller. On average, a strong rise in intelligent technology development is linked to a reduction of more than two years in education mismatch.

This improvement is not uniform across the country. Eastern China, with its more advanced industries and stronger labor markets, benefits the most. Regions that are labor-intensive, technology-intensive, or more market-oriented also see stronger gains. In contrast, areas where technology adoption is weaker or labor markets function less smoothly, see smaller or insignificant effects.

Differences also appear across industries. Intelligent technology has little impact in agriculture, where its use is limited. Manufacturing benefits more, but the greatest improvements are found in services, where digital tools and intelligent systems are now widespread. Among workers, women and middle-aged or older employees gain the most. These groups have historically faced higher risks of over-education, so they benefit more when new high-skill jobs become available.

Why Skill Matching Improves

The study goes a step further to explain why this improvement happens. Intelligent technology upgrades the overall skill structure of employment. As technology advances, the economy demands more high-skilled workers relative to low-skilled ones. This makes it easier for educated workers to find suitable jobs and reduces the pressure that once pushed them into positions below their qualifications.

In effect, intelligent technology helps the labor market absorb the growing supply of educated workers. Instead of education outpacing job demand, technology-driven change brings demand closer to supply.

Lessons Beyond China

At a time when automation fears dominate global discussions, this research offers a more balanced message. Intelligent technology does not automatically destroy good jobs or waste human capital. When combined with supportive institutions, functioning labor markets, and ongoing skills development, it can help people find work that truly matches their abilities.

For China, and for other countries facing similar transitions, the key challenge is not slowing technology down, but making sure its benefits are widely shared. Intelligent technology, the study suggests, can be more than a productivity tool. It can also be a bridge between education and opportunity, helping workers finally put their skills to work where they matter most.