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Jobs and technology in general equilibrium: A three-elasticities approach

Author

Listed:
  • Baldwin, Richard

    (Graduate Institute, Geneva)

  • Haaland, Jan I.

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Venables, Anthony J.

    (The Productivity Institute University of Manchester, and Monash University)

Abstract

The impact of technological progress on jobs and wages has been subject to much empirical and some theoretical work. However, most of this literature has not addressed the general equilibrium interplay between the productive factors that are affected, the sectors in which these factors are used, and the consequent changes in the structure of employment and factor returns. This paper draws on tools from general equilibrium trade theory to provide an integrated approach to these issues. The analysis centres around three key elasticities linking technological change to jobs – the jobs-displacing substitution effect, the job-creating demand effect, and the general-equilibrium effects, through which factors are reallocated between sectors. The results highlight the role of relative factor intensities and the importance of openness in determining the effects of technology on jobs, wages, and structural change. The implications of interaction between non-tradable and tradable sectors are analysed.

Suggested Citation

  • Baldwin, Richard & Haaland, Jan I. & Venables, Anthony J., 2021. "Jobs and technology in general equilibrium: A three-elasticities approach," Discussion Paper Series in Economics 2/2021, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2021_002
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    Cited by:

    1. Chrystalla Kapetaniou & Christopher A. Pissarides, 2025. "Productive Robots And Industrial Employment: The Role Of National Innovation Systems," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(1), pages 25-52, February.
    2. Caselli, Mauro & Fracasso, Andrea & Scicchitano, Sergio & Traverso, Silvio & Tundis, Enrico, 2025. "What workers and robots do: An activity-based analysis of the impact of robotization on changes in local employment," Research Policy, Elsevier, vol. 54(1).
    3. Kerstin Hotte & Melline Somers & Angelos Theodorakopoulos, 2022. "Technology and jobs: A systematic literature review," Papers 2204.01296, arXiv.org.

    More about this item

    Keywords

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    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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