Trade, Jobs, and E-commerce: Evidence from Korea

Abstract

E-commerce is rapidly growing. In the early 2000s, the size of Korea’s B2C e-commerce market was less than 10 trillion KRW. By 2016, it had exceeded 60 trillion KRW. In 2016 Korea, the total B2C exports increased by more than 80%, reaching 2.3 trillion KRW. As consumers are shifting toward e-commerce, they enjoy a wider variety of goods and services at better prices from domestic as well as foreign markets. Gains from e-commerce are clear as documented by several scholars including Brynjolffson et al. (2003, 2012), Goolsbee and Klenow (2006), and recently, Einav et al. (2017). What is unclear about e-commerce, and has been rarely asked from the perspective of international trade and employment, is whether e-commerce activity substitutes or complements trade in goods, and whether it creates or destroys jobs. This report provides evidence on the relationship between e-commerce and trade in goods and on the relationship between e-commerce and jobs given data in Korea.