Abstract: The phenomenon of “polarization” in digital employment is widespread around the world. The employment of high- and low-skilled labor increases and the employment of middle-skilled labor decreases, which leads to the controversy between the views of “machine-replacement” and “machine-created employment”. The academic community has come to different conclusions on this issue, and has not revealed the full picture of the "polarization" mechanism. This paper presents the research developments and frontiers of relate issues by comprehensively combing and analyzing the domestic and international literature, draws on the existing research experience, and condenses the mechanism and formation path behind the “polarization”, which is used to analyze the current situation of employment and income polarization in China. This paper proposes a framework model of factor market and product market in employment, in which the product market plays the role of inducing the labor demand, and the factor market builds the traditional three-factor model of digital technology and “information-labor-capital”, and introduces the “technology-data-factor” model. The role of technology in information generates information monopoly and information asymmetry, which includes high-skilled workers in the labor market and excludes low-skilled workers from the market. Besides, the role of technology in labor directly generates employment polarization, which is manifested in the total effect of creating and destroying labor and employment. Additionally, the role of technology in capital determines the negotiation power of labor and capital in how to distribute the income created by the two. Data factors are dependent on digital labor, which is easy to form the “unipolar” result of “strengthened” high-skilled labor and “weakened” middle- and low-skilled digital labor. Finally, the magnitude of employment polarization depends on the result of the joint game between traditional factors, digital factors and product markets.