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Technological Progress and (Un)employment Development

Author

Listed:
  • Blien, Uwe

    (Institute for Employment Research (IAB), Nuremberg)

  • Ludewig, Oliver

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

In recent times the employment effects of technical progress raised much intention. Will recent productivity gains lead to technological unemployment or to a new prosperity? In our paper it is shown formally that under general and standard preconditions the price elasticity of demand on product markets is decisive: Technological progress leads to an expansion of employment if product demand is elastic. It is accompanied, however, by shrinkage of employment if product demand is inelastic. A transition from the elastic into the inelastic range of the demand function for the most important product(s) can already suffice to plunge a region into crisis. In our empirical analysis we use industry level time series data on output, prices, employment and national income for Germany provided by the Federal Statistical Office. We estimate Marshallian type demand functions using an instrumental variables estimator to derive the price elasticities for different industries and link this information to the regional labour market performance of the respective industries and regions.

Suggested Citation

  • Blien, Uwe & Ludewig, Oliver, 2017. "Technological Progress and (Un)employment Development," IZA Discussion Papers 10472, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10472
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    References listed on IDEAS

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    1. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    2. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    3. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    4. David H. Autor & David Dorn & Gordon H. Hanson, 2015. "Untangling Trade and Technology: Evidence from Local Labour Markets," Economic Journal, Royal Economic Society, vol. 0(584), pages 621-646, May.
    5. 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.
    6. Thijs ten Raa & Ronald Schettkat (ed.), 2001. "The Growth of Service Industries," Books, Edward Elgar Publishing, number 2137, August.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

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    2. Kropp, Per & Theuer, Stefan & Fritzsche, Birgit & Buch, Tanja & Dengler, Katharina, 2017. "Die Digitalisierung verändert die Berufswelt : Substituierbarkeitspotenziale in Sachsen-Anhalt," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Sachsen-Anhalt-Thüringen 201702, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Gnangnon, Sèna Kimm, 2020. "Internet and tax reform in developing countries," Information Economics and Policy, Elsevier, vol. 51(C).
    4. Fabio D'Orlando, 2018. "Problems, solutions and new problems with the third wave of technological unemployment," Working Papers 2018-02, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    5. Hafenrichter, Julia & Hamann, Silke & Thoma, Oliver & Buch, Tanja & Dengler, Katharina, 2016. "Digitalisierung der Arbeitswelt : Folgen für den Arbeitsmarkt in Baden-Württemberg," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Baden-Württemberg 201603, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Katarzyna Piwowar-Sulej & Krzysztof PodsiadÅ‚y, 2022. "Technological innovation and the labor market: The two-way non-reciprocal relationships with a focus on the confectionery industry in Poland," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 18(3), pages 135-171.
    7. Mortensen, Anders Winther & Mathiesen, Brian Vad & Hansen, Anders Bavnhøj & Pedersen, Sigurd Lauge & Grandal, Rune Duban & Wenzel, Henrik, 2020. "The role of electrification and hydrogen in breaking the biomass bottleneck of the renewable energy system – A study on the Danish energy system," Applied Energy, Elsevier, vol. 275(C).
    8. repec:iab:iabdpa:201719 is not listed on IDEAS
    9. Neumann, Uwe, 2023. "Regional adaptability to digital change: May the Swabian force be with you," Ruhr Economic Papers 1004, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. repec:iab:iabdpa:201814 is not listed on IDEAS
    11. Saam, Marianne & Niebel, Thomas & Schulte, Patrick, 2017. "The sectoral impact of the digitisation of the economy: Final report," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 181911.

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    JEL classification:

    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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