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  • P-ISSN 2586-2995
  • E-ISSN 2586-4130
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KDI Journal of Economic Policy. Vol. 44, No. 3, August 2022, pp. 75-99

https://doi.org/10.23895/kdijep.2022.44.3.75

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Job Creation during Korea’s Transition to a Knowledge Economy†

KYUNGSOO CHOI

Author & Article History

Manuscript received 10 November 2021; revision received 10 November 2021; accepted 18 January 2022.

Abstract

This paper analyzes job creation when the Korean economy transitioned to a knowledge economy from the 1990s to the 2010s. During this period, the ratio of service to manufacturing jobs increased, knowledge intensive industries grew, and job creation became geographically concentrated around Seoul. The changes slowed down in the 2010s, and overall job growth weakened. To analyze the effect of job creation driver industries during this period, the main part of which are knowledge intensive tradable service industries, on local service job creation, I use a modified version of the local labor market of Moretti (2010). I analyze the job changes during 1995-2005 and during 2006-2016 in 237 Si-Gun-Gu areas in the Census on Establishments datasets. I find that one manufacturing job creates 0.5 local service jobs and that one tradable service job creates 1.1 jobs within Gu areas of metro cities and 2.3 jobs in Si-Gun areas. The job creation relationship between the tradable and local service sectors was not altered in this period. As more jobs were created in the tradable sector driven by the transition to a knowledge economy, job creation overall remained active, with the opposite also being true.

Keywords

Korea, Job Creation, Local Labor Market Model, Knowledge Economy

JEL Code

J01, J21, J23, J24, R11, R12

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