This paper investigates the effect of both manufacturing-specific and neutral
technological changes on employment in the Korean economy, focusing on
labor reallocation across sectors. Empirical findings of this paper are: (1)
manufacturing-specific technological improvements are a key driving force of
labor reallocation from manufacturing to services in the long run, (2)
manufacturing-specific technological improvements raise employment in both
sectors in the short run, and (3) the employment effect of neutral
technological advances is positive but not significant. These results imply that
jobless growth is not likely to be induced by technological innovations in
Korea.