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Technical change, unemployment and labor skills


Author Info

  • Nelly-Eleni Pavlidou
  • Persefoni V. Tsaliki
  • Ioannis N. Vardalachakis


Purpose – This paper aims to contribute to the open, theoretical debate upon the effects of technical change on the production and labor process. Design/methodology/approach – The “optimistic” approach, which connects the compensation mechanisms and human capital theory, is compared to the dynamic approach of the labor process. Recent Labor Force Survey data are used to identify the trends and characteristics of labor markets in G-7 countries. Findings – In all G-7 countries, unemployment is present and deepening in the last two decades, whereas any employment growth observed is mainly associated with part-time, temporary, low-paid and vulnerable jobs. Moreover, any rise in employment rates refers rather exclusively to unskilful labor. Practical implications – Neither the increase in effective demand (high growth rates), nor the relaxation of labor market rigidities could lead to a sufficient employment growth that would evade unemployment. In addition, the increased investment in human capital failed to upscale workers' position in the production process. Originality/value – The value of this paper lies in its acknowledgement that an effectual policy agenda for labor-related issues should break apart from conventional beliefs that the increase in flexibility of labor market, the abolishment of asymmetries in supply and demand of labor skills and the enhancement of economy's effective demand could cope and provide a solution to current labor market hazards. JEL classification: B14, P16, J20, J24, O30

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Social Economics.

Volume (Year): 38 (2011)
Issue (Month): 7 (July)
Pages: 595-606

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Handle: RePEc:eme:ijsepp:v:38:y:2011:i:7:p:595-606

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Related research

Keywords: Compensation; Dynamic labor process; Human capital; Labour; Machine tools; Machinery; Mechanisms; Skills;

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References listed on IDEAS
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  1. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  2. Laurence Ball & N. Gregory Mankiw, 2002. "The NAIRU in Theory and Practice," Harvard Institute of Economic Research Working Papers 1963, Harvard - Institute of Economic Research.
  3. Bengt-Åke Lundvall, 2004. "Why the New Economy is a Learning Economy," DRUID Working Papers 04-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  4. Persefoni V. Tsaliki, 2009. "Economic development and unemployment: do they connect?," International Journal of Social Economics, Emerald Group Publishing, vol. 36(7), pages 773-781, June.
  5. Christopher Freeman, 1991. "Innovation, Changes of Techno-Economic Paradigm and Biological Analogies in Economics," Revue Économique, Programme National Persée, vol. 42(2), pages 211-232.
  6. Theodore W. Schultz, 1962. "Reflections on Investment in Man," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1.
  7. Persefoni Tsaliki, 2008. "Economic development, human capital and technical change: the question of machinery revisited," International Review of Economics, Springer, vol. 55(4), pages 363-371, December.
  8. Sloane, P. J. & Theodossiou, I., . "An Econometric Analysis of Low Pay Earnings Mobility," Working Papers 98-05, Department of Economics, University of Aberdeen.
  9. Christopher Freeman, 1991. "Innovation, Changes of Techno-Economic Paradigm and Biological Analogies in Economics," Revue économique, Presses de Sciences-Po, vol. 0(2), pages 211-232.
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