New technology and labour Markets: Entrants, outsourcing and matching
AbstractThe impact of new technology (ICT) on labour markets and welfare is analyzed in a model of matching. First, ICT lowers cost and speed of market access, thus reducing frictions in matching a searching worker to an opportunity. It raises output and lowers the cost of entry for a new firm. The rise in scale of aggregate employment raises productivity. Second, since the net effect of ICT raises the probability of a successful search by workers relative to a successful search by firms, workers share of the match surplus rises. Third, it induces more learning and innovation. Fourth, ICTs allows hitherto excluded segments to access new networks. This reduces the ability of members of an existing network to extract the entire surplus from a new entrant. Finally, it encourages cumulative improvements in technology and skills. More labour-using technological progress is induced. Multiple equilibria are possible, however, due to endogenous choice of training and technology. Therefore investment in training and technology may be at less than socially optimal levels. Policy implications follow.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24620.
Date of creation: Aug 2005
Date of revision:
Publication status: Published in The Indian Journal of Labour Economics 48.4(2005): pp. 853-868
outsourcing; distance labour; matching; technology; multiple equilibria;
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chen, Yongmin & Ishikawa, Jota & Yu, Zhihao, 2004.
"Trade liberalization and strategic outsourcing,"
Journal of International Economics,
Elsevier, vol. 63(2), pages 419-436, July.
- Chen, Yongmin & Ishikawa, Jota & Yu, Zhihao, 2001. "Trade Liberalization and Strategic Outsourcing," Discussion Papers 2001-04, Graduate School of Economics, Hitotsubashi University.
- Yongmin Chen & Jota Ishikawa & Zhihao Yu, 2002. "Trade Liberalization and Strategic Outsourcing," Carleton Economic Papers 02-12, Carleton University, Department of Economics, revised Jul 2004.
- Gene M. Grossman & Elhanan Helpman, 2002.
"Outsourcing in a Global Economy,"
149, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
- Grossman, G.M. & Helpman, E., 2002. "Outsourcing in a Global Economy," Papers 218, Princeton, Woodrow Wilson School - Public and International Affairs.
- Gene M. Grossman & Elhanan Helpman, 2002. "Outsourcing in a Global Economy," NBER Working Papers 8728, National Bureau of Economic Research, Inc.
- Grossman, Gene & Helpman, Elhanan, 2002. "Outsourcing in a Global Economy," CEPR Discussion Papers 3165, C.E.P.R. Discussion Papers.
- Gene M. Grossman & Elhanan Helpman, 2002. "Outsourcing in a Global Economy?," Harvard Institute of Economic Research Working Papers 1966, Harvard - Institute of Economic Research.
- David Encaoua & Abraham Hollander, 2002.
"Competition Policy and Innovation,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
- MartÌn Rama, 2003. "Globalization and the Labor Market," World Bank Research Observer, World Bank Group, vol. 18(2), pages 159-186.
- Laing, Derek & Palivos, Theodore & Wang, Ping, 1995. "Learning, Matching and Growth," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 115-29, January.
- Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 217-27, April.
- Gandal, Neil & Shy, Oz, 2001.
"Standardization policy and international trade,"
Journal of International Economics,
Elsevier, vol. 53(2), pages 363-383, April.
- Acemoglu, Daron, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 445-64, July.
- Bronwyn H. Hall, 2002. "The Assessment: Technology Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 18(1), pages 1-9, Spring.
- Dossani, Rafiq & Kenney, Martin, 2003. "Went for Cost, Stayed for Quality?: Moving the Back Office to India," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt0b7764tt, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
- Robin Mansell, 2001. "Digital Opportunities and the Missing Link for Developing Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 17(2), pages 282-295, Summer.
- Ashima Goyal, 2006.
"The Impact of ICT in Making Global Markets More Inclusive,"
Development Economics Working Papers
22336, East Asian Bureau of Economic Research.
- Ashima Goyal, 2006. "The impact of ICT in making global markets more inclusive," Working Papers 2006-013, Madras School of Economics,Chennai,India.
- Ashima Goyal, 2013. "Growth drivers: ICT and inclusive innovations," Working Papers 2013-018, Madras School of Economics,Chennai,India.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.