When machines pay workers more: AI adoption and labor's rising share in Chinese manufacturing

In the era of the digital economy, artificial intelligence (AI) is reshaping the landscape of corporate production and income distribution. Based on data from China A-share listed companies from 2010 to 2024, this study empirically examines how AI reshapes labor's share of income and its underlying mechanisms. The findings reveal that the application of AI has significantly increased the share of labor income in enterprises, with this effect being particularly pronounced in labor-intensive and high-tech firms. Mechanistic analysis indicates that AI primarily empowers labor factors and enhances their income share through three pathways: improving total factor productivity, boosting innovation efficiency, and optimizing employee skill structures. This study provides new empirical evidence for understanding the income distribution effects of AI at the micro-level of enterprises.