Empirical test of the impact of the digital economy on China's employment structure

• Digital economy development has a significant impact on employment structure. • With the advancement of digitization, the workforce has become more manufacturing-oriented, high-tech, and highly trained. • It is necessary to promote the development of digital economy. Changes in employment structure are important factors in developing countries' economic development, industrial restructuring, and labor productivity increases.Based on provincial panel data of China from 2014 to 2020, this paper empirically analyzes the impact of the development of the digital economy on China's employment structure. The purpose of this study is to gain a comprehensive understanding of China's employment structure adjustment trends in the digital economy era, as well as to provide a qualitative and quantitative foundation for the development of the digital economy, industrial structure optimization, and employment promotion policies. The results show that the digital economy has significantly impacted China's employment structure. At the industrial level, its influence process presents the characteristics of an "inverted U-shape," while at the trade level and skill levels, it presents the characteristics of a "positive U-shape." In the initial stage of development, the employment of the secondary sector, high-tech industry, and highly skilled workers were relatively reduced. With the advancement of digitization, the workforce has become more manufacturing-oriented, high-tech, and highly trained. Further mechanism testing shows that upgrading industrial structure and the stock of human capital has a certain degree of gain effect on the employment structure of the digital economy's development. Therefore, in the digital economy, it is vital to support, promote, and lead enterprises to accelerate the process of digital transformation, increase workers' knowledge and skills, and stimulate the dividend of human capital.