Technological Change and Employment Polarization: Evidence from East Asia

Yuyang Wang

doi:10.54097/9rx6m722

Authors

Yuyang Wang School of Finance and Public Management, Anhui University of Finance and Economics, Anhui, 233030, China

DOI:

https://doi.org/10.54097/9rx6m722

Keywords:

Technological change; employment polarization; east Asia; labor markets; skill-biased technological change.

Abstract

Technological transformation has become one of the most powerful forces shaping labor markets worldwide. East Asian economies, in particular Japan, Korea, and China, are undergoing structural changes marked by rising demand for high-skilled jobs, shrinking middle-skilled employment, and the persistence of certain low-skilled segments. This study focuses on the phenomenon of employment polarization and examines how technological change influences skill-specific employment outcomes. We employ an extended Solow growth model together with the framework of skill-biased technological change. The analysis draws on harmonized labor force data from 2010 to 2022. Fixed-effects estimations incorporate both technological indicators and institutional characteristics. The empirical results demonstrate clear evidence of polarization: technology intensity is positively associated with high- and low-skilled employment, while negatively linked to medium-skilled jobs. Cross-country comparison further shows that institutional arrangements play a decisive role. Employment practices in Japan help cushion displacement, flexible market institutions in Korea amplify polarization, while dual structure in China sustains low-skilled employment even as urban centers promote high-skilled growth. The study concludes that inclusive growth in the face of rapid technological change depends on policies that strengthen skills, expand vocational training, and improve labor adaptability.

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