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What crowding-out effect does the digital economy have on the labor force?

Labor substitution effect.

The crowding-out effect of digital economy on labor force means that with the wide application of digital technology and the improvement of automation process, traditional labor force may be replaced by machines, software or automation systems. This substitution effect may lead to the reduction or disappearance of some jobs, which will have an impact on the labor market. However, the digital economy will also create new employment opportunities and demands, especially in the fields of digital technology and related service industries, so the structure and demand of the labor force may also change.