Effects of smart city construction on employment: mechanism and evidence from China

Based on the first batch of smart city pilots in China, this paper systematically investigates the impact of smart city construction on urban employment and employment structure, and its influence mechanism and urban heterogeneity are explored using the difference-in-differences (DID) model. The main conclusions are as follows: (1) Smart city construction significantly promotes urban employment, especially employment in the secondary and tertiary industries. (2) Digital technology development and public services are important mechanisms for smart city construction to improve urban employment. (3) There was heterogeneity among Chinese cities, with the employment promotion effect of smart city construction is primarily reflected in cities located in the eastern and central regions, medium cities, large cities, as well as cities with higher levels of financial development, human capital, and informatization. (4) Through different impacts on various sectors, smart city construction promotes the transfer of employment to the service sector and optimizes the urban employment structure. Conclusions enrich the academic community’s understanding of the development and construction of smart cities and provide enlightenment and reference for the formulation and promulgation of relevant supporting policies.