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

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Aug 2019
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. The adoption of new technologies will possibly increase in Peru, but, in the meantime, there is still chance for investing in workers’ skills, so they become less automatable and more productive.