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We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers

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  • Alan Manning

Abstract

There is little doubt that technology has had the most profound effect on altering the tasks that wehumans do in our jobs. Economists have long speculated on how technical change affects boththe absolute demand for labour as a whole and the relative demands for different types of labour.In recent years, the idea of skill-biased technical change has become the consensus view aboutthe current impact of technology on labour demand, namely that technical change leads to anincrease in the demand for skilled relative to unskilled labour painting a bleak future for theemployment prospects of less-skilled workers. But, drawing on a recent paper by Autor, Levyand Murnane (2003) about the impact of technology on the demand for different types of skills,this paper argues that the demand in the least-skilled jobs may be growing. But, it is argued thatemployment of the less-skilled is increasingly dependent on physical proximity to the moreskilledand may also be vulnerable in the long-run to further technological developments.

Suggested Citation

  • Alan Manning, 2004. "We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers," CEP Discussion Papers dp0640, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0640
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    References listed on IDEAS

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    3. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    4. Sen, Amartya, 1983. "Poverty and Famines: An Essay on Entitlement and Deprivation," OUP Catalogue, Oxford University Press, number 9780198284635.
    5. Leontief, Wassily & Duchin, Faye, 1986. "The Future Impact of Automation on Workers," OUP Catalogue, Oxford University Press, number 9780195036237.
    6. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    7. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
    8. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters,in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
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    11. Enrico Moretti, 2002. "Human Capital Spillovers in Manufacturing: Evidence from Plant-Level Production Functions," NBER Working Papers 9316, National Bureau of Economic Research, Inc.
    12. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    13. Paul Gregg & Stephen Machin & Alan Manning, 2004. "Mobility and Joblessness," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 371-410 National Bureau of Economic Research, Inc.
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    Keywords

    Labor Demand and Technology; Inequality;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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