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Information and communication technology diffusion and skill upgrading in Korean industries

  • Jai-Joon Hur
  • Hwan-Joo Seo
  • Young Soo Lee
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    We examine the relationship between the directly observable indicator of new technology, information and communication technology (ICT) investment intensity, and skill upgrading by analyzing changes in employment and wage structure of 25 Korean industrial sectors over the 1993-1999 period. The estimation results indicate the following implications. First, although ICT expenditure and investment have increased sharply since 1993, it appears that ICT investment has begun to be complementarily combined with skilled labor only since 1996. Second, our results support the 'limited substitution hypothesis'. ICT has substituted low-skilled non-production workers, whereas the increased demand for high-skilled workers is driven by ICT diffusion in the second sub-period. This asymmetric trend between high-skilled and low-skilled non-production workers in Korea reveals significant differences in comparison with the experiences of other OECD countries. Third, the existence of substitutability between ICT diffusion and low-skilled non-production workers in Korea may cast doubt on the appropriateness of the non-production workers' category, a category regarded as a proxy variable of high-skilled workers in most previous studies.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/1043859042000304061
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    Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

    Volume (Year): 14 (2005)
    Issue (Month): 7 ()
    Pages: 553-571

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    Handle: RePEc:taf:ecinnt:v:14:y:2005:i:7:p:553-571
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    1. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
    2. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November.
    3. Timothy F. Bresnahan, 1997. "Computerization and Wage Dispersion: An Analytical Reinterpretation," Working Papers 97031, Stanford University, Department of Economics.
    4. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    5. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
    6. Erik J. Brynjolfsson & Thomas Malone & Vijay Gurbaxani & Ajit Kambil, 1991. "Does Information Technology Lead to Smaller Firms?," Working Paper Series 123, MIT Center for Coordination Science.
    7. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
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