Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 35, No. 3, pp.207-240
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2022
Received 29 Jun 2022 Revised 07 Aug 2022 Accepted 08 Aug 2022

Robotization and Labor Supply in the Context of a Dynamic Monopsony: Novel Evidence from South Korea

Ahmed J. Saade ; Constantinos Alexiou ; Yacine Belghitar
Ahmed J. Saade, University College London, Department of Economics and Cranfield School of Management, Cranfield University, UK
Constantinos Alexiou, (Corresponding Author), Cranfield School of Management, Cranfield University, UK
Yacine Belghitar, Cranfield School of Management, Cranfield University, UK

JEL Classification: J2, J3, J42


We estimate the effects of robotization on labor supply in Manufacturing, Services and the whole of the South Korean economy using exponential hazard and a random effects logit methodologies over the period 1999-2019. Our findings suggest that a larger operational stock of industrial robots in manufacturing is associated with manufacturing (non-manufacturing) workers becoming more (less) responsive to a change in wages in their decision to quit to non-employment, whilst the ease with which firms can poach workers is found to be unaffected by robotization.


Automation, Dynamic monopsony, Elasticity of labor supply, Industrial robots, Labor share, South Korea


Declaration of interest statement: The authors report there are no competing interests to declare.


  • Abbring, Jaap H., and Gerard J. Ven Den Berg. The unobserved heterogeneity distribution in duration analysis. Biometrika 94(No.1 2007): 87–99. []
  • Acemoglu, D. and Restrepo, P. Automation and New Tasks: How Technology Displaces and Reinstates Labor. Journal of Economic Perspectives 33(No.2 2019): 3–30. []
  • Acemoglu, D. and Restrepo, P. Robots and jobs: Evidence from US labor markets. Journal of Political Economy 128 (No.6 2020): 2188–2244. []
  • Acemoglu, D., Lelarge, Claire and Pascual Restrepo. Forthcoming. Competing with Robots: Firm-Level Evidence from France. AEA Papers and Proceedings 110 (2020): 383–88 []
  • Acemoglu, D., Manera, A., and Restrepo, P. Does the US Tax Code Favor Automation?. NBER Working Paper No. w27052.
  • Aghion, P., Antonin, C., Bunel, S. and Xavier J. What are the labor and product market effects of automation? New evidence from France. CEPR Discussion Paper 14443, 2020.
  • Aksoy, C. G., Ozkan B., and Philipp, J. Robots and the Gender Pay Gap: Evidence from Europe European Economic Review 134 (2021): 103693. []
  • Arntz, M., Gregory, T., and Zierahn, U. The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis. OECD Social, Employment and Migration Working Papers, No.189, OECD Publishing, Paris, 2016.
  • Arntz, M., Gregory, T., and Zierahn, U. Revisiting the risk of automation. Economics Letters 159(2017): 157–160. []
  • Arntz, M., Gregory, T., and Zierahn, U. Digitalization and the future of work: Macroeconomic consequences. ZEW Discussion Papers, No. 19-024, ZEW−Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim, 2019. []
  • Ashenfelter, Orley C., Farber, H., and Ransom, M. R. Labor Market Monopsony. Journal of Labor Economics 28 (No.2 2010): 203–210 []
  • Atkinson, Robert D. The Case Against Taxing Robots. Information Technology & Innovation Foundation, April 8, 2019. []
  • Autor, D., and Salomons, A. Is Automation Labor Share-Displacing? Productivity Growth, Employment, and the Labor Share. Brookings Papers on Economic Activity Spring: 1–87.
  • Autor, D., and Handel. M. J., “Putting tasks to the test: Human capital, job tasks, and wages. Journal of Labor Economics 31 (No.2 2013): 59–96. []
  • Autor, D., Dorn, D., Katz, L. F., Patterson, C., and Van Reenen, J. “The Fall of the Labor Share and the Rise of Superstar Firms. The Quarterly Journal of Economics 135 (No.2 2020): 645–709. []
  • Autor, D., Levy, F., and Murnane, R. J., “The skill content of recent technological change: An empirical exploration. Quarterly Journal of Economics 118 (No.4 2003): 1279–1333. []
  • Bachmann, R., Gökay, D., and Frings, H.. Labour Market Polarisation and Monopsony Power. IZA Conference Paper, 2019.
  • Ballestar, M. T., Díaz-Chao, ., Sainz, J., and Torrent-Sellens, J. Knowledge, robots and productivity in SMEs: Explaining the second digital wave. Journal of Business Research 108(2020): 119–131. []
  • Barbieri, L., Mussida, C., Piva, M., and Vivarelli, M., Testing the Employment Impact of Automation, Robots and AI: A Survey and Some Methodological Issues. IZA Discussion Papers No. 12612, Institute of Labor Economics (IZA), Bonn, 2019. []
  • Barkai, S. Declining Labor and Capital Shares. The Journal of Finance 75 (No.5 2020): 2421–2463. []
  • Barth, E., Roed, M., Schone, P., and Umblijs, J., How Robots Change Within-Firm Wage Inequality. IZA Discussion Papers No. 13605, Institute of Labor Economics (IZA), Bonn
  • Belloc, Filippo., Burdin, Gabriel and Fabio Landini. 2020. Robots and Worker Voice: An Empirical Exploration. IZA Discussion Papers No. 13799, Institute of Labor Economics (IZA), Bonn. []
  • Benedetti, M. The economics of robots in industrial applications. Industrial Robot 4 (No.3 1977): 109-118. []
  • Bhaskar, V., Manning, A., and To. T. Oligopsony and monopsonistic competition in labor markets. Journal of Economic Perspectives 16(No.2 2002): 155–174. []
  • Blanchard, O., and Giavazzi. F. Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets. The Quarterly Journal of Economics 118 (No.3 2003): 879–907. []
  • Bowles, J., The computerisation of european jobs., /, 2014.
  • Burdett, K., and Mortensen, D. T. Wage differentials, employer size, and unemployment. International Economic Review 39 (No.2 1998): 257–73. []
  • Carbonero, F., Ernst, E., and Weber, E. Robots Worldwide: The Impact of Automation on Employment and Trade. Beiträge zur Jahrestagung des Vereins für Socialpolitik: Gender Economics, ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg, 2020.
  • Card, D., and Krueger, A. B., Myth and Measurement: The New Economics of the Minimum Wage. Princeton, NJ: Princeton University Press, 1995.
  • Cette, G., Devillard, A., and Spiezia, V. The contribution of robots to productivity growth in 30 OECD countries over 1975–2019. Economics Letters 200 (2021): 109762. []
  • Chen, P., Karabarbounis, L., Neiman, B. The global rise of corporate saving. Journal of Monetary Economics 89 (2017): 1-19. []
  • Chiacchio, F., Petropoulos, G., and Pichler, D. The impact of industrial robots on EU employment and wages: A local labour market approach. Bruegel Working Papers Issue 2, 2018.
  • Cirillo,V. Rinaldini, M., Staccioli, J., and Virgillito, M. E., “Technology vs. workers: the case of Italy’s Industry 4.0 factories. Structural Change and Economic Dynamics 56(2021): 166-183. []
  • Cséfalvay Z. Robotisation in Central and Eastern Europe: catching up or dependence?. European Planning Studies 28 (No.8 2020): 1534-1553. []
  • Dauth, W., Findeisen, S., Südekum, J., and Woessner, N. The rise of robots in the German labour market., 2017.
  • De Vries, G. J., Gentile, E., Miroudot, S., and Wacker, K. M. The rise of robots and the fall of routine jobs. Labour Economics 66 (2020): 101885. []
  • Eeckhout, J., Hedtrich, C., and Pinheiro, R. Automation, Spatial Sorting, and Job Polarization. 2019 meeting Papers 581, Society for Economic Dynamics, 2019.
  • Faber, M. Robots and reshoring: Evidence from Mexican labor markets. Journal of International Economics 127 (2020). []
  • Fernández-Macías, E., Klenert, D., and Antón, J. I. Not so disruptive yet? Characteristics, distribution and determinants of robots in Europe. Structural Change and Economic Dynamics 58 (2021): 76-89. []
  • Flatau, P. Some Reflections on the ‘Pigou-Robinson’ Theory of Exploitation. History of Economics Review 33 (No.1 2001): 1–16. []
  • Ford, M. The Rise of the Robots. New York: Basic Books, 2015.
  • Fox, J T. Estimating the employer switching costs and wage responses of forward-looking engineers. Journal of Labor Economics 28 (No.2 2010): 357–412. []
  • Frey, C. B. and Osborne, M. A. “The Future of Employment: How Susceptible are Jobs to Computerisation?. Technological Forecasting and Social Change 114 (No.C 2017): 254–280 []
  • Frey, C. B., Thor, B., and Chen, C. Political machinery: did robots swing the 2016 US presidential election?. Oxford Review of Economic Policy 34 (No.3 2016): 418–442. []
  • Fujiwara, I., and Feng Z. Robots and labour: implications for inflation dynamics. BIS Paper, 111c, 2020.
  • Giuntella, O., and Tianyi W. Is an Army of Robots Marching on Chinese Jobs?. IZA Discussion Papers No. 12281, Institute of Labor Economics (IZA), Bonn, 2019. []
  • Goos, M., and Manning, A. Lousy and Lovely Jobs: The Rising polarization of Work in Britain. The Review of Economics and Statistics 89 (No.1 2007): 118–133. []
  • Graetz, G. and Michaels, G. Robots at Work. The Review of Economics and Statistics 100 (No.5 2018): 753–768. []
  • Gregory, T., Salomons, A., and Zierahn, U. Racing with or against the machine? Evidence from Europe. CESifo Working Papers 7247, 2018. []
  • Hamidi-Noori, A. and Templer, A. Factors Affecting the Introduction of Industrial Robots. International Journal of Operations & Production Management 3 (No.2 1983): 46-57. []
  • Hasegawa, Y. New developments in the field of industrial robots. International Journal of Production Research 17 (No.5 1979): 447–454. []
  • Hirsch B., Jahn, E. J., and Schnabel, C. Do Employers Have More Monopsony Power in Slack Labor Markets? ILR Review 71 (No.3 2018): 676-704. []
  • Hirsch, B., Thorsten, S., and Schnabel, C. Differences in labor supply to monopsonistic firms and the gender pay gap: An empirical analysis using linked employer-employee data from Germany. Journal of Labor Economics 28 (No.2 2010): 291–330. []
  • Huang, Y., and Naubahar S., From ‘Labour Dividend’ to ‘Robot Dividend’: Technological Change and Workers’ Power in South China. Agrarian South: Journal of Political Economy 6 (No.1 2017): 53–78. []
  • International Federation of Robotics. 2020. World Robotics: Industrial Robots.
  • International Federation of Robotics. 2021. The World Robotics 2021: Industrial Robots,, .
  • Jeong, G., and Jeong S. Trends of Marxian Ratios in South Korea, 1980–2014. Journal of Contemporary Asia 50 (No.2 2020): 260-283. []
  • Jimeno, Juan F. Fewer babies and more robots: economic growth in a new era of demographic and technological changes. SERIEs 10: 93–114, 2019. []
  • Jungmittag, A., and Pesole, A. The impact of robots on labour productivity: A panel data approach covering 9 industries and 12 countries. JRC Working Papers Series on Labour, Education and Technology No. 2019/08, European Commission, Joint Research Centre (JRC), Seville, 2019.
  • Karabarbounis, L. and Neiman B. The Global Decline of the Labor Share. The Quarterly Journal of Economics 129 (No.1 2014): 61–103. []
  • Kariel, J. Job Creators or Job Killers? Heterogeneous Effects of Industrial Robots on UK Employment. Labour 35(No.1 2021): 52–78. []
  • Kim, B. G., Explaining movements of the labor share in the Korean economy: factor substitution, markups and bargaining power. J Econ Inequal 14 (2016): 327–352. []
  • Kim, D., and Kim, W.Y. What drives the labor share of income in South Korea? A regional analysis. Growth and Change 51 (No.3 2020): 1304-1335. []
  • Kim, S. J. Analysis of Generation and Distribution of Value-Added at Top 50 Enterprises (2002-2013). Economic Reform Report, 2015–1 (in Korean).
  • Klenert, D., Fernández-Macías, E., and Antón J.I. Don’t blame it on the machines: Robots and employment in Europe., 2020.
  • Koch, M., Manuylov, I., and Smolka, M. Robots and firms. CESifo Working Paper No. 7608, Center for Economic Studies and ifo Institute (CESifo), Munich, 2019. []
  • Koster, S., and Brunori, C. What to do when the robots come? Non-formal education in jobs affected by automation. International Journal of Manpower 42(No.8 2021): 1397–1419. []
  • Leduc, S., and Zheng L. Robots or Workers? A Macro Analysis of Automation and Labor Markets. Federal Reserve Bank of San Francisco working paper 2019–17, 2020.
  • Lee, B. H. Labour Income Share in Korea: Measuring Issues and Trends. e-Labor News No.159, Issue paper, Korea Labor Institute, 2015.
  • Lee, B. H. Labor Income Share and Income Inequality in Korea. Labor Market & Employment Policies Working Paper 2016-01, Korea Labor Institute, 2015.
  • Leigh, N. G., Kraft, B., and Lee H. Robots, skill demand and manufacturing in US regional labour markets. Cambridge Journal of Regions, Economy and Society 13(2020): 77–97. []
  • Lordan, G. Robots at work. A report on automatable and non-automatable employment shares in Europe. Directorate-General for Employment, Social Affairs and Inclusion, European Commission, 2018.
  • Manning, A. Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton, NJ: Princeton University Press, 2003.
  • Manning, A. Monopsony in labor markets: a review. Industrial and Labor Relations Review 74 (No.1 2020): 3–26. []
  • Miller, B and R. D. Atkinson. Are Robots Taking Our Jobs, or Making Them?, Information Technology & Innovation Foundation, September, 2013.
  • Kim, M. High Tech, Low Growth: Robots and the Future of Work. Historical Materialism 26 (No.4 2018): 3–34. []
  • National Assembly Budget Office. Corporate Internal Reserve: Status and Economic Impact. Economic Trends and Issues, No. 30 (in Korean), 2014.
  • Nedelkoska, L., and Quintini, G. Automation, skill use and training. OECD Social, Employment and Migration Working Papers, No. 202., 2018.
  • Okubayashi, K. The Impacts of Industrial Robots on Working Life in Japan. Journal of General Management 11 (No.4 1986): 22–34. []
  • Paba, S., Solinas, G., Bonacini, L., and Fareri, S. Robots, Trade and Employment in Italian Local Labour Systems. DEMB Working Paper Series N. 183, Dipartimento di Economia Marco Biagi, 2020.
  • Pajarinen, M, and Rouvinen P. Computerization threatens one third of finnish employment. ETLA Brief 22, 2014.
  • Persky, J., and Tsang H. Pigouvian Exploitation of Labor. The Review of Economics and Statistics 56 (No.1 1974): 52–57. []
  • Pigou, Arthur C. The Economics of Welfare. London: Macmillan, 1924.
  • Pischke, J.S., and Velling, J. Employment Effects of Immigration to Germany: An Analysis Based on Local Labor Markets. The Review of Economics and Statistics 79 (No.4 1997): 594–604. []
  • Pouliakas, K. Determinants of automation risk in the eu labour market: A skills-needs approach. IZA Discussion Paper No. 11829, 2018. []
  • Priest, G. Timing “disturbances in labor market contracting: Roth’s findings and the effects of labor market monopsony. Journal of Labor Economics 28 (No.2 2010): 447-472. []
  • Pulkka V. V. A free lunch with robots – can a basic income stabilise the digital economy? Transfer: European Review of Labour and Research 23 (No.3 2017): 295–311. []
  • Pyo, H. K. and Rhee, K. Productivity Analysis on the Service Sector in Korea: Evidence from Industry-Level and Firm-Level Data. Seoul Journal of Economics 31 (No.1 2021): 21–61.
  • Ransom, M. R. and R. L. Oaxaca. New market power models and sex differences in pay. Journal of Labor Economics 28 (No.2 2010): 267–289. []
  • Ransom, M. R. and Sims D. P. Estimating the firm’s labor supply curve in a “new monopsony framework: Schoolteachers in Missouri. Journal of Labor Economics 28 (No.2 2010): 331–355. []
  • Rieu, D. M., and Park, H. W. Unproductive Activities and the Rate of Surplus Value at the Industry Level in Korea, 1995–2015. Journal of Contemporary Asia 50 (No.2 2020): 284–307. []
  • Robinson, Joan V. The economics of imperfect competition. Macmillan: London, 1933.
  • Robinson, Joan V. Reminiscences, in Contributions to Modern Economics, Oxford: Blackwell, 1978 []
  • Rodriguez, F., and Jayadev, A. The Declining Labor Share of Income. Journal of Globalization and Development 3 (No.2 2013): 1–18. []
  • Rodríguez, F., and Ortega, D. Are capital shares higher in poor countries? Evidence from Industrial Surveys. Wesleyan Economics Working Papers 2006-023, Wesleyan University, Department of Economics, 2006.
  • Song, E. “What drives labor share change?, Evidence from Korean industries. Economic Modelling 94 (2021): 370–385. []
  • Spitz-Oener, A. Technical Change, Job Tasks, and Rising Educational Demands: Looking Outside the Wage Structure. Journal of Labor Economics 24 (No.2 2006): 235–270. []
  • Tolbert, C. M., and Sizer. M. U.S. Commuting Zones and Labor Market Areas. A 1990 Update. Economic Research Service Staff Paper, No. 9614, 1996.
  • Torii, Y. Robotization in Korea: Trend and implications for industrial development. Technological Forecasting and Social Change 35 (No.2–3, 1989): 179–190. []
  • Yonemoto, K. The socio - economic impacts of industrial robots in Japan. Industrial Robot 8 (No.4 1981): 238–241. []