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Thursday 18 September 2014

Robotics and youth unemployment in China

In the UK, the issue of youth unemployment is never far from the headlines.

This is also the case in China, but for both good and bad reasons. According to a blog written by  Terence Tse, Associate Professor of Finance at ESCP Europe, and Mark Esposito (Harvard University), China has an impressively low youth unemployment rate - but only because their metrics differ from the universally accepted ones. In addition to this, it would seem that the most disadvantaged group of unemployed young people are those with the highest level of education, a direct opposite to many other countries.

"Drawn from the China Household Finance Survey, the figure below shows that those who are less educated are far more likely to hold a job than those who are better educated. In other words, the higher the level of education received, the higher the probability of not being able to find employment. This trend is in direct contrast with that in happening in the U.S. and the U.K., where higher education is more helpful to young people in securing positions."

This demand for unskilled workers has led to a rise in wages and, as the recession continues, greater pressure to cut costs at the same time. The end result is an increase in automated production, thus putting low-skilled workers back into the job market.

To read more about Tse and Esposito's thoughts on this issue, visit CNBC online.

 

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