Technology Divide and Productivity Effect of Aging Workforce
This study analyzes how the aging of workers affects labor productivity depending on the technology level of the workplace. Specifically, this study estimates the effect of aging on the value added per employee by the DID (difference in difference) method using the Workplace Panel Survey (2005-2015) of the Korea Labor Institute, which provide detailed information on the proportion of old workers in the workplace and technology level. Our results indicate that an increase in the proportion of old workers has had a greater negative effect on labor productivity in the workplace where the use of computers and electronic devices has been high. In addition, when the technology is measured by the degree of automation of the workplace and the introduction of new production technology, the negative productivity effects of an increase in the proportion of old workers are found to be more serious. Interestingly, an increase in the proportion of old female workers is found to have a greater negative effect on the labor productivity than an increase in the proportion of old male workers. With rapid aging and automation progression in Korea, our results suggest that the labor productivity in Korean firms is likely to decline in future. Therefore, there is a need to strengthen education and training for old workers, especially female old workers, in high-tech workplaces.