About the labour market effects of technological progress

Abstract

The authors assume that the employment effects of technical progress depend on the economic framework conditions, among others on the demand reaction on the goods markets. 'According to this, technical progress leads to an increase in employment if the product demand is elastic; if the product demand is not elastic, technical progress leads to a decrease in employment. To demonstrate this theorem that predicts very contrasting developments for profit-maximising companies, a (...) theoretical model is designed, and some supporting empirical results are presented.' The authors criticise the analysis of Frey and Osborn as being incomplete, 'since it does not consider the resulting price and quantity changes and thus the demand effects - a substantial component of the compensation process. This results in exaggeratedly alarmist scenarios. By implication, however, this does not mean that drastic consequences of productivity effects of the digital revolution for the employment development are generally excluded'. (IAB)

Cite article

Blien, U., Ludewig, O., Rossen, A. & Sanner, H. (2019): Zu den Arbeitsmarktwirkungen des technischen Fortschritts. In: H. Hagemann, J. Kromphardt & B. Sahin (Hrsg.) (2019): Arbeit und Beschäftigung - Keynes und Marx (Schriften der Keynes-Gesellschaft, 12), p. 43-55.