ICT diffusion and skill upgrading in Korean industries

We examine the relationship between the directly observable indicator of new technology, ICT investment ratio, and skill upgrading by analysing changes in employment and wage structure of 25 Korean industrial sectors over the 1993-99 period. The results show that there has been little relationship between ICT diffusion and skill upgrading during the entire period of 1993-99. Meanwhile, the positive relationship was found for the 1996-99 period. Although ICT expenditure and investment have increased sharply since 1993, it appears that the ICT investment has begun to be complementarily combined with skilled labour only since 1997. This explains partly the Bank of Korea’s recent finding that the impact of ICT diffusion on productivity was very limited in the 1990s. – ICT ; skilled workers ; skill-biased ; technological change ; productivity paradox