Abstract:

In recent years, technological innovations represented by automation and generative artificial intelligence have accelerated the reshaping of labor markets. Against this backdrop, China's labor market has been simultaneously shaped by both traditional stratification structures and the growing skill premium, resulting in a more complex and dynamic landscape. Drawing on large-scale online recruitment as well as survey data, this study systematically examines the skill-based segmentation of China's labor market and how it interacts with traditional institutional divides. Key findings reveal that skill disparities have emerged as a critical dimension of labor market differentiation in China. Workers engaged in occupations requiring higher levels of abstract cognitive skills enjoy significant advantages over other skill groups in terms of employment risks, income levels, working conditions, and social security benefits. These advantages persist even after accounting for differences in human capital and institutional segmentation. Furthermore, skill stratification interacts heterogeneously with traditional institutional segmentation: institutional protections in the public sector mitigate market consequences of skill disparities- particularly in employment risks and earnings-whereas the hukou system fails to exhibit such buffering effects. Notably, wage gaps driven by skill differences are even more pronounced among urban hukou holders. Overall, the findings support our hypothesis that skills constitute a key dimension of labor market segmentation in contemporary China. The market has become increasingly differentiated along the axis of skill competitiveness, with workers possessing higher-level abstract cognitive skills occupying more advantageous positions in terms of market returns. At the same time, technology-driven skill premiums and pre-existing institutional logics jointly shape hierarchical orders, underscoring the complexity of "layered transitions" within China's modernization process.

Key words: differences in skill returns, institutional moderation, technological changes, labor market segmentation