Are We Nearly There Yet?: New Technology Adoption and Labor Demand in Peru

Abstract

Forecasts about the effect of new technologies on labor demand are generally pessimistic. However, little is known about the current level of adoption and the effect on labor demand, particularly in developing countries. This paper exploits a recent employer survey in Peru to offer empirical evidence in these regards. Our results show that although the adoption of new technologies by firms is still incipient, it increases the labor demand of higher-skilled workers and does not affect the demand of the low-skilled. However, we find a negative effect on the demand for workers in routine manual tasks occupations. The adoption of new technologies will possibly increase in Peru. Meanwhile, it is important to keep investing in workers' skills, so they become less automatable and more productive.

Mobility Restrictions and Automation in the Developing World: Evidence from Peru's Labor Market

“…This conclusion has key policy implications. As highlighted by other studies (for example, Nedelkoska and Quintini, 2018) it reinforces the need to design training policies to equip workers with cognitive and nonroutine skills that help them transition to career paths less affected by technology adoption.…”

“…While the impact of technological change on labor markets has been extensively studied in the developed world (for example, Autor et al, 2003;Goos and Manning, 2007;Acemoglu and Restrepo, 2020), the evidence is less conclusive for developing economies, where technology adoption is constrained by limited access to credit, infrastructure barriers (Foster and Rosenzweig, 2010), and lower labor costs, especially in the presence of large informal labor markets. Some studies find null or modest links to employment and wages (De Vries et al, 2020;Novella et al, 2023), while others find a decline in jobs that are more vulnerable to automation (Gasparini et al, 2021;Brambilla et al, 2022). 1 Given this mixed evidence, this paper investigates whether exogenous shocks that limit labor mobility can be a turning point for automation in the developing world.…”

Mobility Restrictions and Automation in the Developing World: Evidence from Peru's Labor Market

“…This conclusion has key policy implications. As highlighted by other studies (for example, Nedelkoska and Quintini, 2018) it reinforces the need to design training policies to equip workers with cognitive and nonroutine skills that help them transition to career paths less affected technology adoption.…”