Does digital finance reduce the employment in the finance industry? Evidence from China

Finance has long been a popular major in college education, but the development of digital finance raises the concern about job losses in the finance industry. Using novel panel datasets from China, we document robust city-level evidence that digital finance significantly reduces the employment in the finance industry. Moreover, we find that the labor efficiency in the finance industry increases with the intensity of digital finance, which supports the argument of technological unemployment. Our analysis suggests that more attention should be paid to the potential unbalance between the labor demand and supply in the finance industry.