Empirics of technology and unemployment in advanced countries
This study is the first attempt to investigate the empirical relation between progress in technology and unemployment of high and low skilled workers at macro level. Although there is substantial literature on the theory to associate unemployment with technology, empirical analysis of the relation i...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2021-03-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1525.pdf
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| Summary: | This study is the first attempt to investigate the empirical relation between progress in
technology and unemployment of high and low skilled workers at macro level. Although there is
substantial literature on the theory to associate unemployment with technology, empirical analysis
of the relation is rare. The theoretical background is split between two opposing assertions: On one
side, technology is claimed to increase unemployment since more advanced technology replaces
labor, especially in advanced countries where the cost of labor as wages is too high. On the contrary,
technology is supposed to cause the enlargement of the already existing sectors and the formation
of new industries. We established a model to check for the existence of a cointegrating relation
between technology and unemployment using additional control variables with Pedroni’s (1999,
2001) methodology. After securing our model’s adequacy, we report that technology leads to more
unemployment, even in developed countries. On the other hand, we detailed the analysis by
searching for the nature of the same relation with high and low skilled workers. Our estimation
results revealed that the relationship is somewhat different for these skill groups. |
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| ISSN: | 1841-8678 1844-0029 |