KDI Journal of Economic Policy

Korea Development Institute (한국개발연구원)
권호 표지
DOI QR코드

DOI QR Code

The Impact of COVID-19 on Jobs in Korea: Does Contact-intensiveness Matter?

  • AUM, SANGMIN (Department of Economics, Kyung Hee University)
  • Received : 2022.03.18
  • Published : 2022.05.31
Download PDF
⟨ Previous Next ⟩

Abstract

This paper studies how COVID-19 has affected the labor market in Korea through a general equilibrium model with multiple industries and occupations. In the model, workers are allocated to one of many occupations in an industry, and industrial or occupational shocks alter the employment structure. I calibrate the model with Korean data and identify industrial and occupational shocks, referred to here as COVID-19 shocks, behind the employment dynamics in 2020 and 2021. I find that COVID-19 shocks are more severe for those with jobs with a higher risk of infection and in those that are more difficult to do from home. Interestingly, the relationship between COVID-19 shocks and infection risk weakened as the pandemic progressed, whereas the relationship between COVID-19 shocks and easiness of work-from-home strengthened. I interpret the results as meaning that the pandemic may direct future technological changes to replace tasks that require contact-intensive steps, and I simulate the impact of such technological changes through the lens of the model. The results show that such technological changes will lower the demand for manual workers compared to the demands for other occupations. This contrasts with the earlier trend of job polarization, where manual workers continued to increase their employment share, with the share of routine workers secularly declining at the same time.

Keywords

References

  1. Acemoglu, D. and D. Autor. 2010. "Skills, Tasks and Technologies: Implications for Employment and Earnings," in: O. Ashenfelter and D. Card (eds.), Handbook of Labor Economics, chapter 12, 1(4): 1043-1171.
  2. Acemoglu, D. and P. Restrepo. 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares and Employment," American Economic Review, 108(6): 1488-1542. https://doi.org/10.1257/aer.20160696
  3. Adams-Prassl, A., T. Boneva, M. Golin, and C. Rauh. 2020. "Work that can be done from home: Evidence on variation within and across occupations and industries," IZA Discussion Paper 13374.
  4. Aum, Sangmin. 2020. "The Rise of Software and Skill Demand Reversal," mimeo.
  5. Aum, Sangmin. 2021 (forthcoming). "Post-COVID19 Labor Market Structure," in Kyu-Chul Jung (ed.), Chapter 3, Macroeconomic Challenges and Policy Direction for the Post-COVID Era, KDI (in Korean).
  6. Aum, Sangmin, Sang Yoon (Tim) Lee, and Yongseok Shin. 2018. "Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity," Journal of Monetary Economics, 97: 1-21. https://doi.org/10.1016/j.jmoneco.2018.05.010
  7. Aum, Sangmin, Sang Yoon (Tim) Lee, and Yongseok Shin. 2021a. "COVID-19 Doesn't Need Lockdowns to Destroy Jobs: The Effect of Local Outbreaks in Korea," Labour Economics, Vol. 70.
  8. Aum, Sangmin, Sang Yoon (Tim) Lee, and Yongseok Shin. 2021b (forthcoming). "Who Should Work from Home during a Pandemic? The Wage-Infection Trade-off," FRB St. Louis Review.
  9. Aum, Sangmin, Sang Yoon (Tim) Lee, Yongseok Shin. 2021c. "Inequality of Fear and Self-Quarantine: Is There a Trade-off between GDP and Public Health?" Journal of Public Economics, Vol. 194.
  10. Autor, D. and D. Dorn. 2013. "The Growth of Low-skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, 103(5): 1553-1597 https://doi.org/10.1257/aer.103.5.1553
  11. Autor, D., F. Levy, and R. J. Murnane. 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, 118(4): 1279-1333. https://doi.org/10.1162/003355303322552801
  12. Dingel, J. and B. Neiman. 2020. "How many jobs can be done at home?" Journal of Public Economics, Vol. 189.
  13. Duernecker, G. and B. Herrendorf. 2020. "Structural Transformation of Occupation Employment," Working Paper.
  14. Herrendorf, B., R. Rogerson, and A. Valentinyi. 2013. "Two Perspectives on Preferences and Structural Transformation," American Economic Review, 103(7): 2752-2789. https://doi.org/10.1257/aer.103.7.2752
  15. Hicks, M. J., D. Faulk, and S. Devaraj. 2020. "Occupational exposure to social distancing: A preliminary analysis using O*NET data," Technical report, Center for Business and Economic Research.
  16. Jaimovich, N. and H. Siu. 2020. "Job Polarization and Jobless Recoveries," The Review of Economics and Statistics, 102(1).
  17. Lee, S. and Y. Shin. 2017. "Horizontal and vertical polarization: Task-specific technological change in a multi-sector economy," Working Paper 23283, National Bureau of Economic Research.
  18. Ministry of Science and ICT. 2020. "2019 Survey of O2O Service," 5 February.
  19. Ministry of Science and ICT. 2021. "2020 Survey of O2O Service," 9 April.
  20. Mongey, S., L. Pilossoph, and A. Weinberg. 2021. "Which workers bear the burden of social distancing?" Journal of Economic Inequality, Vol. 19.