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[2021-1] Impacts of Industrial Robot Distribution on Employment

Group : Macro Economy
조사총괄팀 (02-759-4172) 2021.03.15 4006

Industries with large incentives to use robots make up a large share of the manufacturing sector in Korea. And as the price of robots has declined thanks to advancements in technology, industrial robots have been distributed more rapidly across Korea than in other countries. According to a task-based approach, however, the installation of robots has had an opposite impact: while robots have the effect of replacing human labor, they also create new tasks that cannot be replaced by robots.

 

Considering these facts, this paper analyzed what impacts industrial robots in Korea have on employment conditions in the industry concerned. We calculated the adjusted penetration of robots by industry, using the Acemoglu·Restrepo (2020) method, based on IFR data. The calculation shows that after 2010, the adjusted penetration of robots increased more rapidly in the automobile, electronic parts, and computer industries than in other industries. Next, we included the adjusted penetration of robots in Korea as explanatory variables, and estimated a second stage fixed-effect model, using the adjusted penetration of robots in European countries as an instrumental variable. According to the estimation, after the financial crisis from 2010 to 2018, in cases where there was an increase in the penetration of robots by one notch, the growth in the number of employed and real wage growth in the industry concerned declined by 0.1%p and 0.3%p, respectively. This implies that the distribution of robots, which has proceeded rapidly since 2010, created a labor-displacement effect in the industry concerned. However, we need to be mindful that this paper’s analysis considers only the effects of robots penetration on employment conditions of the industry concerned. It is necessary to conduct further analysis in the future covering the effects of increasing productivity among industries, the effects of creating new industries, and related matters.

 

The role of robots is expected to expand steadily in the future, as robotics, AI, and ICT technologies grow and develop. In particular, as the digital transformation has accelerated since COVID-19, robots are now projected to be introduced more rapidly than ever before. We need to increase sectoral labor mobility, while actively discovering new high value-added industries, so that the higher productivity brought about by robots can lead to more tasks and more jobs.

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