The Effect of ICT Adoption on Labor Demand: A Cross-Region Comparison
Papers in Regional Science, Volume98, Issue1, February 2019, Pages 3-16 - DOI/10.1111/pirs.12321
Posted: 15 Feb 2019
Date Written: February 5, 2019
Abstract
This paper assesses the information and communications technologies (ICT)‐labour relationship from a macroeconomic perspective to clarify some ambiguity regarding the overall employment effect of ICT adoption in the short and long term. For that, we use two panel data techniques, generalized method of moments (GMM) and the pooled mean group model (PMG), on a large sample of developing and developed countries, covering five regions, during the period from 1990–2015. Our findings provide evidence that the overall impact of ICT adoption is labour saving in the short term, and this adverse effect still carries on in the long run, inducing higher structural unemployment. The displacement of the labour market induced by ICT adoption is real, persistent, and universal. Policy‐makers should facilitate the transition of labour from old to new jobs and reduce the period of adaptability.
Keywords: ICT Adoption, Labor Demand, Developing and Developed Countries, GMM, PMG
JEL Classification: O33, J23, C33
Suggested Citation: Suggested Citation