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The Labor Market Impact of Digital Technologies

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  • Sangmin Aum
  • Yongseok Shin

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.

Suggested Citation

  • Sangmin Aum & Yongseok Shin, 2025. "The Labor Market Impact of Digital Technologies," Review, Federal Reserve Bank of St. Louis, vol. 107(5), pages 1-10, April.
    • Handle: RePEc:fip:fedlrv:99792
    DOI: 10.20955/r.2025.05
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    References listed on IDEAS

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    1. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2022. "Artificial Intelligence and Jobs: Evidence from Online Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 293-340.
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    3. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    4. Simona Abis & Laura Veldkamp, 2024. "The Changing Economics of Knowledge Production," The Review of Financial Studies, Society for Financial Studies, vol. 37(1), pages 89-118.
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    6. Aum, Sangmin & Lee, Sang Yoon (Tim) & Shin, Yongseok, 2018. "Computerizing industries and routinizing jobs: Explaining trends in aggregate productivity," Journal of Monetary Economics, Elsevier, vol. 97(C), pages 1-21.
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    8. Ron Adner & Phanish Puranam & Feng Zhu, 2019. "What Is Different About Digital Strategy? From Quantitative to Qualitative Change," Strategy Science, INFORMS, vol. 4(4), pages 253-261, December.
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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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