Do technological improvements in the manufacturing sector raise or lower employment?

Yongsung Chang () and Jay H. Hong

No 05-02, Working Paper from Federal Reserve Bank of Richmond

Abstract: We find that technology's effect on employment varies greatly across manufacturing industries. Some industries exhibit a temporary reduction in employment in response to a permanent increase in TFP, whereas far more industries exhibit an employment increase in response to a permanent TFP shock. This raises serious questions about existing work that finds that a labor productivity shock has a strong negative effect on employment. There are tantalizing and interesting differences between TFP and labor productivity. We argue that TFP is a more natural measure of technology because labor productivity reflects shifts in the input mix as well as in technology.

Keywords: Employment; Business cycles (search for similar items in EconPapers)
Date: 2005
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Related works:
Working Paper: Do technological improvements in the manufacturing sector raise or lower employment? (2005)
Journal Article: Do Technological Improvements in the Manufacturing Sector Raise or Lower Employment? (2006)
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