The Measurement of IT Contribution by Decomposed Dynamic Input-Output Tables in Korea (1980-2002)

Abstract

This paper analyzes the effects of the development in IT on productivity. We define the IT industries through decomposed IO-Tables and estimate the IT capital stock from 1980 to 2002. which is used in measuring the IT-using effect. We have removed the effect of the quality growth in IT capital using the Harmonized Price Method. The IT capital has been accumulated rapidly since 1995 and the difference in the accumulation rates among industries has been quite large. Decomposing the growth of labor productivity into capital accumulation and TFP growth, we have not found any significant increase in productivity of the entire economy. Its effect seems to have been restricted to several IT-using sectors only. Also, the labor movement which is related to the intensity of the IT capital has not been observed calling for the need for a more flexible labor market.