The Impact of ICTs on Employment in Latin America: A Call for Comprehensive Regulation

Abstract

The purpose of this research is to determine the impact on employment from information and communication technologies. Prior research has shown that both communication and automation are displacing jobs, mainly those with middle-level skills.

ICTs are currently generating employment in developing countries as they make business and government operations more efficient but this may not be the case in the long term given Latin Americas’ weak economic and political environment. The region could be relegated to offer low wage services, potentially increasing poverty in the region.

A statistical analysis of a panel of 23 Latin American countries over a 20 year period indicates that mobile phones do not appear to be either helpful or harmful to service employment. Broadband, because penetration is low, it is not surprising that is shows a positive effect. Education is significant and negative, which could be explained by low levels of education as all of the countries in the study are listed close to the bottom of the PISA rankings. Other factors that negatively impact employment are capital formation, burdensome bureaucracies and corruption.

The paper concludes with policy recommendations.

Keywords: ICTs, employment, Latin America, mobile, broadband, education, corruption

JEL Classification: F63,O18, O33, J21, J18