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Technological Unemployment: A New View

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  • Peter Matthews

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Abstract

This paper extends the now familiar Shapiro-Stiglitz (1984) model of labor market behavior to reconsider the controversial proposition that some forms of innovation have persistent displacement effects. In particular, it finds that when distinctions between random production failures and reduced effort level are difficult to draw, the adoption f new methods of production that compel more effort, break down more often and/or allow for closer supervision will sometimes induce technological joblessness. The possible magnitude of such dislocation, its welfare effects and the possibilities for invention are then discussed in detail.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0212.pdf
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Bibliographic Info

Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0212.

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Length: 43 pages
Date of creation: Jun 2002
Date of revision:
Handle: RePEc:mdl:mdlpap:0212

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Related research

Keywords: labor discipline; technological change; displacement;

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  1. Rebitzer, James B, 1993. "Radical Political Economy and the Economics of Labor Markets," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1394-434, September.
  2. Kimball, Miles S, 1994. "Labor-Market Dynamics When Unemployment is a Worker Discipline Device," American Economic Review, American Economic Association, vol. 84(4), pages 1045-59, September.
  3. Silvestre, Joaquim, 1993. "The Market-Power Foundations of Macroeconomic Policy," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 105-41, March.
  4. Jeremy I. Bulow & Lawrence H. Summers, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment," NBER Working Papers 1666, National Bureau of Economic Research, Inc.
  5. Shields, Michael P, 1989. "The Machinery Question: Can Technological Improvements Reduce Real Output?," Economica, London School of Economics and Political Science, vol. 56(222), pages 215-24, May.
  6. Peter Hans Matthews & Ivan T. Kandilov, 2002. "The Cost of Job Loss and the "New" Phillips Curve," Eastern Economic Journal, Eastern Economic Association, vol. 28(2), pages 181-202, Spring.
  7. Carmichael, H Lorne, 1990. "Efficiency Wage Models of Unemployment--One View," Economic Inquiry, Western Economic Association International, vol. 28(2), pages 269-95, April.
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