Bank of Korea Economic Research Report
[Asia Economy Reporter Seo So-jeong] The introduction of new automation technologies and the expansion of IT investments generally reduce the risk of retirement for workers, but the impact of technology varies by age group, according to a recent study.
Jung Jong-woo, Associate Research Fellow at the Microeconomic Institution Research Office of the Bank of Korea, and Lee Cheol-hee, Professor of Economics at Seoul National University, revealed this in their report titled "A Study on the Impact of Technology Adoption on the Retirement Risk of Older Workers" (BOK Economic Research) on the 20th.
According to the medium projection of the Statistics Korea's future population estimates, the proportion of the working-age population (ages 15-64) aged 50 and above in South Korea is expected to steadily increase from 33.1% in 2020 to 36.6% in 2030 and 42.1% in 2050.
The report tracked the employment status (retirement status) of 962,404 workers aged 25-69 employed at 3,033 companies as of early 2015 for three years (2015-2017) after technology adoption at each company. Through survival analysis, which examines how long workers maintain employment at their current companies, the study investigated the impact of technology on workers' retirement risk.
The study found that technology adoption?such as the introduction of new automation technologies, expansion of IT investments, and increased purchase of IT-related equipment?generally lowers workers' retirement risk.
However, the retirement risk due to automation technology adoption for older workers aged 50 and above was 0.88 times, higher than that of younger workers at 0.77 times, indicating that the positive impact of technology adoption was greater for younger workers.
Moreover, depending on job type and reasons for retirement, technology adoption sometimes increased the retirement risk for older workers. Specifically, the introduction of automation technology increased the retirement risk of older office workers by 3.62 times (1.3 times compared to younger workers), and the purchase of IT-related equipment raised the involuntary retirement risk of older workers by 1.48 times (with no effect on younger workers).
Associate Research Fellow Jung said, "When establishing policies to maintain the workforce in response to population decline, the impact of technology adoption on employment may vary depending on the age of workers," adding, "A detailed analysis is required on the reasons why older workers are relatively vulnerable to employment when new technologies are introduced."
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