IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v11y2023i1p12-d1025424.html
   My bibliography  Save this article

Investigating the Impact of Digital Transformation on the Labor Market in the Era of Changing Digital Transformation Dynamics in Saudi Arabia

Author

Listed:
  • Masahina Sarabdeen

    (Department of Economics, College of Business and Administration, Princess Nourah bint Abdulrahman University, Riyadh 11617, Saudi Arabia)

  • Hind Alofaysan

    (Department of Economics, College of Business and Administration, Princess Nourah bint Abdulrahman University, Riyadh 11617, Saudi Arabia)

Abstract

In Saudi Arabia, limited studies have developed models related to measuring the impact of the digital economy on the labor market. This model concerns the agricultural, service, and industrial sectors in Saudi Arabia. This study further investigates the relationship between digitalization, labor productivity, and unemployment using the ARDL error correction method for time-series data obtained from the World Bank database for the period of 2001–2019. The findings of this study illustrate, digital variables such as fixed broadband subscriptions (LNFBS), mobile cellular subscriptions (LNMCS), and computer, communications, and other services (LNCCO) do not significantly affect the labor market in the agricultural sector. LNMCS and LNCCO do not influence the service sector. However, they are negatively influencing the industrial sector and labor productivity. In contrast, LNFBS has a positive impact on both the service and industrial sectors. Interestingly, all three digital variables significantly reduce unemployment in the long run in Saudi Arabia. However, in the short run, digitalization does not have a positive impact on the economy. This study hopes to benefit policymakers in considering how to reorganize the socioeconomic infrastructure to balance economic growth through greater technology and the utilization of the country’s human resources.

Suggested Citation

  • Masahina Sarabdeen & Hind Alofaysan, 2023. "Investigating the Impact of Digital Transformation on the Labor Market in the Era of Changing Digital Transformation Dynamics in Saudi Arabia," Economies, MDPI, vol. 11(1), pages 1-14, January.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:1:p:12-:d:1025424
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/11/1/12/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/11/1/12/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Su, Chi-Wei & Yuan, Xi & Umar, Muhammad & Lobonţ, Oana-Ramona, 2022. "Does technological innovation bring destruction or creation to the labor market?," Technology in Society, Elsevier, vol. 68(C).
    2. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    3. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    4. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    5. Roman Chinoracký & Stanislava Turská & Lucia Madleòáková, 2019. "Does Industry 4.0 Have The Same Impact On Employment In The Sectors?," Thriving on Future Education, Industry, Business and Society; Proceedings of the MakeLearn and TIIM International Conference 2019,, ToKnowPress.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hawazen Zam Almugren & A. C. Muhammadu Kijas & Masahina Sarabdeen & Jawaher Binsuwadan, 2024. "Does Quality Education and Governance Matter for Women’s Empowerment? The Role of Structural Factors and Governance in the MENA Region," Sustainability, MDPI, vol. 16(23), pages 1-18, November.
    2. Junkai Qi & Jamal Hussain & Yexing Yin & Anwar Khan, 2023. "Agricultural productivity‐environmental sustainability nexus through the lens of digitalization and energy intensity in BRICS countries," Review of Development Economics, Wiley Blackwell, vol. 27(4), pages 2357-2382, November.
    3. Masahina Sarabdeen & Manal Elhaj & Hind Alofaysan, 2024. "Exploring the Influence of Digital Transformation on Clean Energy Transition, Climate Change, and Economic Growth among Selected Oil-Export Countries through the Panel ARDL Approach," Energies, MDPI, vol. 17(2), pages 1-18, January.
    4. Qin, Shuyuan & Liu, Ziqi & Wang, Jie & Wu, Yongqiu, 2024. "The impact of digital transformation on labour demand quantity and structure: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1452-1469.
    5. Wang, Baoyi & Khan, Inayat & Ge, Chenlu & Naz, Huma, 2024. "Digital transformation of enterprises promotes green technology innovation – The regulated mediation model," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    6. Giovanna Patzy Uribe-Linares & Cristian Armando Ríos-Lama & Jorge Alberto Vargas-Merino, 2023. "Is There an Impact of Digital Transformation on Consumer Behaviour? An Empirical Study in the Financial Sector," Economies, MDPI, vol. 11(5), pages 1-16, April.
    7. Mohammed Alojail & Jawaher Alshehri & Surbhi Bhatia Khan, 2023. "Critical Success Factors and Challenges in Adopting Digital Transformation in the Saudi Ministry of Education," Sustainability, MDPI, vol. 15(21), pages 1-24, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    2. Silvia Vannutelli & Sergio Scicchitano & Marco Biagetti, 2022. "Routine-biased technological change and wage inequality: do workers’ perceptions matter?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 409-450, September.
    3. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    4. Irene Brambilla, 2018. "Digital Technology Adoption and Jobs: A Model of Firm Heterogeneity," Department of Economics, Working Papers 117, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    5. Cortes, Matias & Lerche, Adrian & Schönberg, Uta & Tschopp, Jeanne, 2023. "Technological Change, Firm Heterogeneity and Wage Inequality," IZA Discussion Papers 16070, Institute of Labor Economics (IZA).
    6. David Autor & Caroline Chin & Anna Salomons & Bryan Seegmiller, 2024. "New Frontiers: The Origins and Content of New Work, 1940–2018," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1399-1465.
    7. Holger M. Mueller & Paige P. Ouimet & Elena Simintzi, 2015. "Wage Inequality and Firm Growth," LIS Working papers 632, LIS Cross-National Data Center in Luxembourg.
    8. Consoli, Davide & Marin, Giovanni & Rentocchini, Francesco & Vona, Francesco, 2023. "Routinization, within-occupation task changes and long-run employment dynamics," Research Policy, Elsevier, vol. 52(1).
    9. Tan, Joanne, 2024. "Multidimensional heterogeneity and matching in a frictional labor market — An application to polarization," Labour Economics, Elsevier, vol. 90(C).
    10. Sara Amoroso & Pietro Moncada-Paternò-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarization," Sustainability, MDPI, vol. 10(4), pages 1-20, April.
    11. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
    12. López Noria Gabriela, 2021. "Effects of Trade and Technology on the Mexican Labor Market," Working Papers 2021-22, Banco de México.
    13. Mueller, Holger & Simintzi, Elena & Ouimet, Paige, 2015. "Wage Inequality and Firm Growth," CEPR Discussion Papers 10365, C.E.P.R. Discussion Papers.
    14. Sabien Dobbelaere & Mark Vancauteren, 2014. "Market imperfections, skills and total factor productivity : Firm-level evidence on Belgium and the Netherlands," Working Paper Research 267, National Bank of Belgium.
    15. Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).
    16. Albanesi, Stefania & Dias da Silva, Antonio & Jimeno, Juan Francisco & Lamo, Ana & Wabitsch, Alena, 2023. "New Technologies and Jobs in Europe," CEPR Discussion Papers 18220, C.E.P.R. Discussion Papers.
    17. Schmidpeter, Bernhard & Winter-Ebmer, Rudolf, 2021. "Automation, unemployment, and the role of labor market training," European Economic Review, Elsevier, vol. 137(C).
    18. Maarten Goos & Melanie Arntz & Ulrich Zierahn & Terry Gregory & Stephanie Carretero Gomez & Ignacio Gonzalez Vazquez & Koen Jonkers, 2019. "The Impact of Technological Innovation on the Future of Work," JRC Working Papers on Labour, Education and Technology 2019-03, Joint Research Centre.
    19. Lipowski, Cäcilia & Salomons, Anna & Zierahn-Weilage, Ulrich, 2024. "Expertise at work: New technologies, new skills, and worker impacts," ZEW Discussion Papers 24-044, ZEW - Leibniz Centre for European Economic Research.
    20. Mariana Viollaz, 2017. "ICT Adoption in Micro and Small Firms: Can Internet Access Improve Labor Productivity?," CESifo Working Paper Series 6839, CESifo.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:11:y:2023:i:1:p:12-:d:1025424. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.