[2021-1] Impact of Industrial Robot Deployment on Employment

Macro Economy
industrial robots employment Korea automotive electronic components
Research Department(02-759-4150)

As industries with greater incentives to use robots occupy a larger share of production in Korea and the price of robots is declining thanks to technological advances, the deployment of industrial robots in Korea has progressed at a faster pace than in other countries. According to a recent task-based approach, the installation of robots generates opposing effects: (i) displacement of labor and (ii) creation of new tasks that cannot be replaced by robots.


Given this, this paper analyzed the impact of the deployment of industrial robots on employment in a given industry in Korea. First, using data of the International Federation of Robotics (IFR) and relying on Acemoglu and Restrepo (2020), the adjusted penetration of robots (APR) by industry was estimated. The estimates showed that, after 2010, the APR in the automotive, electronic components, and computer sectors rose faster than in other sectors. Next, by setting the APR of Korea as an explanatory variable and the APR of European countries as an instrumental variable, a two-stage fixed effects model was estimated. The results of the estimation showed that, during the period following the global financial crisis (2010 to 2018), a single-unit increase in the APR led the employee growth rate and real wage growth rate in a given industry to decline by 0.1%p and 0.3%p, respectively. This finding suggests that the deployment of robots, which has progressed rapidly since 2010, has generated a labor-displacement effect across industries. It is to be noted, however, that this study considered only the effect of robot installation on the employment of a given industry. Going forward, further studies are necessary to examine the effects of robots on productivity across industries and new industry creation.


The role of robots is expected to expand steadily in tandem with the advancement of robotics, AI, and ICT. In particular, as digital transformation accelerates following the COVID-19 pandemic, robot deployment is likely to accelerate. In this process, new high-value-added industries need to be actively explored and sectoral labor mobility enhanced so that the improved productivity brought about by robotics leads to the creation of new tasks, thereby increasing jobs.

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