Trade, Jobs, and E-commerce: Evidence from Korea

This report explores the substitutability/complementarity between e-commerce activity and trade-in-goods/jobs. Although there is a possibility that e-commerce activity could substitute trade in goods and jobs, we found no such evidence in Korea. In other words, the data in Korea shows that e-commerce activity relates positively to trade in goods. At industry-level, e-commerce activity is positively related (at least, neutral depending on industries) to job growth and creation. At firm-level, e-commerce firms hire more workers than non-e-commerce ones. A caveat in interpreting the evidence we found is that the complementarity between e-commerce and trade/jobs can become stronger or weaker as e-commerce activity continues to grow in the future. Nonetheless, a lesson from the evidence we found is that new policies relating to e-commerce should be formulated in connec-tion with trade and jobs. For e-commerce and trade, we suggest that the government encourage firms (small-and-medium-sized firms in particular) to engage actively in cross-border e-commerce export, while it make efforts to streamline customs clearance processes for e-commerce to lower trade barriers. For e-commerce and jobs, we em-phasize the role of labor market polices with vocational training and retraining programs due to labor market reallocation arising from e-commerce.