Economy 4.0: employment effects by occupation, industry, and gender

The aim of this study is to investigate how the diffusion of the new digital technologies (Economy 4.0-technologies) affects the magnitude and composition of employment in Austria. For this purpose, an input-output framework is adopted taking into account direct as well as indirect effects of the new technologies by industry, occupation and gender. These employment effects are estimated as the difference between a base economy (as represented by a recent Austrian input-output table) and an economy after a 10-year transformation period with the introduction of new production technologies and development of new products for final demand. Based on substitution potentials estimated on detailed occupational level available from previous research, we model the changes in labour productivity. Combining two different scenarios of labour productivity change with two different assumptions about collective wage bargaining outcomes gives us four possible scenarios of macroeconomic paths of Economy 4.0. The results show that due to Economy 4.0 during the next 10 years job displacement will probably be greater than job creation and aggregate employment will decline by 0.80-4.81% relative to total present employment. Furthermore, the results indicate that occupations gaining in employment are highly skilled while the occupations losing in employment are medium-skilled. Also, female workers are adversely affected in terms of employment.