The rapid development of the digital economy (DE) has exerted a profound influence on employment dynamics. Building upon a framework that captures the level of digital economic development, this study examines the effects of the DE on both the quantity and structure of employment. The analysis further explores the mechanisms underlying the influence of DE on employment outcomes from the perspectives of industrial structure and human capital. Results indicate that the DE exhibits both a “creation effect” and a “substitution effect” on total employment, with the creation effect playing the dominant role. As industrial structures advance and rationalize, and human capital structures improve, the promotional effect of DE on total employment will gradually increase. These developments expand job opportunities for highly skilled workers, promote a transition in employment structure from medium-low to high-skill occupations, and exert an “employment polarization” effect across the skill-level structure within the workforce of China. Therefore, this study proposes policy recommendations to accelerate the development of the DE, expand emerging employment opportunities, enhance the digital competencies of the labor force, and emphasize improving their digital literacy.

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