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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.

Suggested Citation

  • Peter Matthews, 2002. "Technological Unemployment: A New View," Middlebury College Working Paper Series 0212, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0212
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    File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0212.pdf
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    References listed on IDEAS

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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 1394-1434, 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 1045-1059, September.
    3. Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 376-414, July.
    4. Carmichael, H Lorne, 1990. "Efficiency Wage Models of Unemployment--One View," Economic Inquiry, Western Economic Association International, vol. 28(2), pages 269-295, April.
    5. Silvestre, Joaquim, 1993. "The Market-Power Foundations of Macroeconomic Policy," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 105-141, March.
    6. Landes, David S., 1986. "What Do Bosses Really Do?," The Journal of Economic History, Cambridge University Press, vol. 46(03), pages 585-623, September.
    7. 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 215-224, May.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    labor discipline; technological change; displacement;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • 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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