THE TRANSFORMATION OF THE LABOR MARKET IN THE PERIOD OF TECHNOLOGICAL DEVELOPMENT AND DIGITALIZATION

Abstract

The rapid technological development and digitalization driven by the Fourth Industrial Revolution are causing fundamental transformations in global labor markets, creating both opportunities and significant challenges for national economies. The purpose of this research is to comprehensively analyze key processes such as job displacement, the formation of new skill requirements, and wage inequality, influenced by artificial intelligence and automation, within the context of global trends and the realities of Azerbaijan. The methodological basis of the study combines a conceptual synthesis of reports from international organizations (IMF, OECD, World Bank), modern academic literature, and Azerbaijan's strategic documents with an econometric regression analysis using the ordinary least squares method. This analysis measures the impact of higher education and information and communication technologies (ICT) on labor productivity, based on national data from 2005-2024. The findings indicate that the technological transformation has a dual nature. On one hand, it leads to workforce displacement by replacing routine tasks, and on the other, it enhances overall productivity by complementing human labor and creating new professions. The econometric model empirically confirms that both the level of higher education and investments in ICT have a statistically significant and positive impact on labor productivity in Azerbaijan. The results of the research hold practical significance for policymakers, educational institutions, and the private sector in preparing the labor market for new challenges, developing competitive human capital, and improving adaptive socio-economic policies.