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Technological advances in manufacturing and their effects on sectoral employment in the Korean economy

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  • Kim, Bae-Geun

Abstract

This paper studies the short- and long-term effects of rapid technological advances in the manufacturing sector (named manufacturing-specific technology shocks) on sectoral employment in the Korean economy. A study on the Korean economy is fruitful since, during deindustrialization, the country exhibited different trends from those in the United States and United Kingdom in terms of manufacturing’s share of output. Based on empirical analyses and a two-sector small open-economy DSGE model, the paper finds that over the long run, employment moves from manufacturing to services following a manufacturing-specific technology shock. In the short run, however, manufacturing employment rises. Even though the Korean economy is highly export-driven, the short-run rise in manufacturing employment is ultimately driven by an investment boom following technological innovations.

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  • Kim, Bae-Geun, 2023. "Technological advances in manufacturing and their effects on sectoral employment in the Korean economy," Economic Modelling, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:ecmode:v:126:y:2023:i:c:s0264999323002456
    DOI: 10.1016/j.econmod.2023.106433
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    Cited by:

    1. Yang Shen, 2024. "Future jobs: analyzing the impact of artificial intelligence on employment and its mechanisms," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-33, April.

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    More about this item

    Keywords

    Deindustrialization; Manufacturing-specific technology shock; Sectoral employment dynamics; Small open-economy DSGE model;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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