Jobs and technology in general equilibrium: A three elasticities approach

Anthony Venables, Richard Baldwin and Jan I. Haaland

No 15739, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The impact of technological progress on jobs and wages has been subject to much empirical and some theoretical work. However, most of this literature has not addressed the general equilibrium interplay between the productive factors that are affected, the sectors in which these factors are used, and the consequent changes in the structure of employment and factor returns. This paper draws on tools from general equilibrium trade theory to provide an integrated approach to these issues. The analysis centres around three key elasticities linking technological change to jobs – the jobs-displacing substitution effect, the job-creating demand effect, and the general-equilibrium effects, through which factors are reallocated between sectors. The results highlight the role of relative factor intensities and the importance of openness in determining the effects of technology on jobs, wages, and structural change. The implications of interaction between non-tradable and tradable sectors are analysed.

Keywords: Technical change; Wages; Employment; Factor intensity (search for similar items in EconPapers)
JEL-codes: F11 F16 J30 O33 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-tid
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Citations: View citations in EconPapers (3)

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Working Paper: Jobs and technology in general equilibrium: A three-elasticities approach (2021)
Working Paper: Jobs and technology in general equilibrium: A three elasticities approach (2021)
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