Compensation or Substitution? Labour Market Effects of Technological and Structural Change

摘要

This article shows the relevance of the theorem on the employment effects of productivity increases in a general framework. The theorem holds under very general conditions, the assumptions made in its derivation are largely standard (see Blien and Sanner 2014). The theorem is potentially very important in explaining (regional) unemployment. We have shown some empirical analyses, which support the relevance of the theorem. The direction of the effect of technological progress depends on the elasticity of demand, i. e. whether the compensating or the substitution effect dominates. On the basis of this finding some positions of the current discussion about technology appear as being not refined enough. In some currently very popular positions, we called in the introduction the "technical theory of labour demand". There the production process is regarded as taking place in a technical system. If an element of this system is replaced, it is no longer needed. However, this view of the production process ignores some basic elements of a capitalist society. It ignores that the production is intermediated by markets and that is follows the calculation of an entrepreneur, who is interested in profit. Crucial economic variables are not regarded, especially the price effects of productivity increases, we focus upon.