The Effects of Artificial Intelligence and Robotics on Employment and Wages in Korean Manufacturing Firms

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dc.contributor.authorJeong, Jun Ho
dc.contributor.authorJo, Hyung Je
dc.date.accessioned2025-06-16T15:00:25Z
dc.date.available2025-06-16T15:00:25Z
dc.date.issued2025-04-17
dc.description.abstractThis article analyzes the effects of two key automation technologies – artificial intelligence (AI) and robotics – on employment and wages in Korean manufacturing since the late 2010s. Drawing on firm-level data from the Survey of Business Activities and individual wage data from the Local Labor Force Survey, the analysis explores both firm- and worker-level impacts. Adoption of these technologies is concentrated in large firms within the electronics and automotive sectors. Robotics has been widely implemented, primarily for cost reduction, safety enhancement, and union avoidance, whereas AI adoption remains limited but is gradually expanding. The results reveal contrasting effects: AI adoption is associated with job creation and wage growth, while robotics tends to reduce both employment and wages – an outcome that diverges from findings in existing firm-level studies. These negative effects appear to stem from Korea’s institutional context, where automation – particularly robotics – is frequently employed to reduce labor costs rather than to enhance productivity, as well as from diminishing marginal returns in industries with long-standing automation. Importantly, these wage effects persist even when U.S.-based automation exposure measures are applied, suggesting broader applicability. However, the findings underscore that the economic impact of automation depends significantly on the motivations and strategies behind its adoption. In the case of Korean manufacturing, capital-biased automation driven by robotics has contributed mainly to labor displacement without generating substantial productivity gains, reflecting Acemoglu and Restrepo’s (2018) notion of ‘so-so automation.’
dc.description.sponsorshipThe Weizenbaum Institute is funded by the German Federal Ministry of Education and Research (BMBF)
dc.identifier.citationJeong, J. H., & Jo, H. J. (2025). The Effects of Artificial Intelligence and Robotics on Employment and Wages in Korean Manufacturing Firms. Weizenbaum Journal of the Digital Society, 5(2). https://doi.org/10.34669/wi.wjds/5.2.5
dc.identifier.doi10.34669/wi.wjds/5.2.5
dc.identifier.issn2748-5625
dc.identifier.urihttps://www.weizenbaum-library.de/handle/id/912
dc.identifier.zdb3064083-0
dc.language.isoeng
dc.publisherWeizenbaum Institute
dc.rightsopen access
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subjectautomation technologies
dc.subjectartificial intelligence
dc.subjectrobotics
dc.subjectemployment
dc.subjectwages and wage setting
dc.subjectmanufacturing
dc.subjectlabor substitution
dc.titleThe Effects of Artificial Intelligence and Robotics on Employment and Wages in Korean Manufacturing Firms
dc.typeArticle
dc.type.statuspublishedVersion
dcmi.typeText
dcterms.bibliographicCitation.issue2
dcterms.bibliographicCitation.journaltitleWeizenbaum Journal of the Digital Society
dcterms.bibliographicCitation.originalpublisherplaceBerlin
dcterms.bibliographicCitation.volume5
local.series.nameThe Weizenbaum Journal of the Digital Society
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Vol. 5 No. 2 (2025)