The Labor Market Impact of Digital Technologies

Abstract

We investigate the impact of digital technology on employment patterns in Korea, where firms have rapidly adopted digital technologies such as artificial intelligence (AI), big data, and cloud computing. By exploiting regional variations in technology exposure, we find significant negative effects on female workers, particularly those in non-IT (information technology) services. This contrasts with previous technological disruptions, such as the IT revolution and robotization, which primarily affected male workers in manufacturing. The negative employment effect of AI did not differ across educational groups, but big data and cloud computing more negatively affected workers with less education. In IT services, although employment shares of professionals and technicians declined, vacancy postings for these positions increased, implying a shift in labor demand toward newer skill sets within the same occupations. These findings highlight both the labor displacement and the new opportunities generated by digital transformation.