Digital adoption, automation, and labor markets in developing and emerging economies

Arbeitspapier

We document a strong negative link between self-employment and the rate of digital adoption by firms in developing and emerging economies. No link between digital adoption and the unemployment rate is found, however. To explain this evidence, we build a general equilibrium search-and-matching model with endogenous labor force participation, self-employment, endogenous firm entry, and information-and-communications technology adoption. The main finding is that changes in the cost of technology adoption per se cannot rationalize the evidence. Instead, changes in firms' barriers to entry directly linked to the cost of technology adoption are key to explain the data.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2019-22

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Labor Demand ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Unemployment: Models, Duration, Incidence, and Job Search ; Industrialization; Manufacturing and Service Industries; Choice of Technology
• Subject: Information-and-telecommunications-technology capital (ICT) ; digital adoption ; automation ; labor search frictions ; unemployment ; self-employment ; endogenous firm entry ; developing and emerging economies

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Finkelstein Shapiro, Alan ; Mandelman, Federico S.
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Atlanta
• (where): Atlanta, GA
• (when): 2019

Further information

• DOI: doi:10.29338/wp2019-22
• Handle: http://hdl.handle.net/10419/228252
• Last update: 10.03.2025, 11:44 AM CET