Labor market adjustments to structural change and technological progress

Technical change greatly contributes to the explanation of economic structural changes. The aim of this paper is to measure the extension and the direction of structural and technological change. The impact of structural and technological changes on sectoral gross output was computed by breaking down the total change into the part due to changes in input-output coefficients (technological change) and the part due to changes and composition of final demand. The decomposition of structural change is based on the following questions. What were the engines of growth? What was the role and impact of technological change and which economies experienced the most and least structural change?

This paper analyzes the effects of changes in relative commodity prices on the distribution of income among factors of production in the context of two models of a simple, two-good economy. In the first model capital is treated as a specific factor in each industry, with labor mobile between industries. The assumption of specificity determines the direction of factor income changes, with magnitudes depending on substitutability between factors and on intensities of factor use within the two industries. In the second model, capital is viewed as a quasi-fixed factor. For the short run, this model is identical to the model first considered. For the long run, this model is identical to the Stolper-Samuelson model in which the direction and magnitude of factor income changes depend solely on relative factor intensities. The difference between the short-run and long-run determinants of changes in factor incomes gives rise to a conflict between factor owners' short-run and long-run interests.

Two debates over labor market structure have occurred in the U.S. since World War II: the structuralist/aggregate demand school debate in the early 1960s and the deindustrialization debate of the 1980s. In both controversies one side offers a structural explanation in which difficulties in the labor market derive from an overall transformation of the economy. The opposing view is that labor market trends cannot be explained by a structural transformation, since no such transformation has taken place. Despite heated policy debates and impressive data collection the essential point of disagreement in both debates remains unresolved: the existence of structural change in the labor market. This paper argues that two fundamental problems have hindered a satisfactory outcome to these recurring debates over structural change in the labor market. First, each side in the debate has a different concept of structure. If a consensus cannot be reached on what structural change in U.S. labor markets means, any debate over the existence and implications of this change is bound to be fruitless. With an imprecise or inconsistent definition of structure the question cannot be settled empirically. The second and more serious difficulty is that both sides use concepts of structure that have more to do with product markets than labor markets. The focus on product markets results from the fundamental assumption that labor demand is a derived demand. This assumption is axiomatic in neoclassical theory and exerts a powerful influence even on structuralist labor economists who reject much of the orthodox approach to labor. The first part of this paper looks at the consequences of this approach to structure. Despite the fact that the debates were sparked by high unemployment and other disturbing trends in the labor market, the debates address labor market structure only indirectly. The theoretical arguments underlying the assorted views reflect a paradigmatic dispute over the nature of economic growth. The second part of the paper discusses the concept of labor market structure and suggests an alternative approach. The paper then returns briefly to the debates over structure to demonstrate how this alternative approach would clarify this controversy. The Two Labor Market Debates The initial impetus to both debates was a secular rise in average unemployment rates. The structuralist/aggregate demand school controversy resulted from an increase in the average unemployment rate to 5.8% between 1958 and 1964 (Frumkin, 1987).(1) Killingsworth (1965) argued that the trend toward higher unemployment rates was due to a structural transformation of the labor market. The disproportionate incidence of high rates of unemployment in specific segments of the labor market led to the Killingsworth twist, a forerunner of the declining middle of the 1980s. Killingsworth's conclusions were based on the observation of lower unemployment rates among more highly skilled and educated workers. However, despite the use of statistics on labor supply to support his argument, Killingsworth was arguing that it was the structure of labor demand that was undergoing transformation. Killingsworth's structuralist arguments were countered by the Council of Economic Advisors (Bowen, 1965). The Council's contention was that although specific sub-groups of the labor force were affected differently over the business cycle, there had been no secular increase in the level of structural unemployment nor had there been significant increases in the unemployment rates of groups considered to be dominated by unskilled workers. The higher unemployment rates after 1957 were attributed to a deficiency of aggregate demand. During the 1980s unemployment reached its highest level since the Depression. Many manufacturing industries were particularly hard hit by the recessions of the early 1980s leading to widespread layoffs and plant closings. Economists such as Robert Reich (1983), Barry Bluestone and Bennett Harrison (1982) argued that high unemployment rates and the loss of manufacturing jobs reflected long-term structural changes in U. …

Recent debates over the persistence of family farms have focused on the importance of “naturalistic” obstacles to the capitalist development of agriculture. According to these arguments, the existence of these barriers in some realms of agricultural production precludes the development of wage labor. I argue, however, that in many instances these obstacles are based primarily on political factors. To demonstrate this thesis I illustrate how the tobacco program until recently has proved to be an obstacle to consolidation and structural change in tobacco production. The tobacco program has conditioned the extent of technological development and structural change in tobacco production. From the 1940s to the 1970s, the tobacco program maintained a system of small-scale producers and discouraged technological change in the industry. Changes in the program in the 1970s and 1980s, however, have contributed to the rapid mechanization and structural change among tobacco producers. Many of the “obstacles” to consolidation were overcome not by technological change, but by weakened political support for the tobacco program. These results suggest that in addition to economic and technological considerations, we need to assess more carefully the political foundations of the capitalist development of agriculture.

This paper analyzes the interaction between structural change and labor market dynamics in West Germany, during a period when industrial employment declined by more than 30% and service sector employment more than doubled. Using transition data on individual workers, we document a marked increase in structural change and turbulence, in particular since 1990. Net employment changes resulted partly from an increase in gross flows, but also from an increase in the net transition ‘yield’ at any given gross worker turnover. In growing sectors, net structural change was driven by accessions from nonparticipation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from non-participation. German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change.

We examine the process of radical transformation that during the last decades has changed labor markets in developed countries and, in particular, the nature of jobs. Indeed, the advances in ICT and robotics have generated the concern that automation could substitute people in a wide range of activities, therefore contributing to the potential increase in the fraction of jobs at risk in the next future. However, empirical evidence on labour demand in the majority of OECD countries emphasizes a process of labour market polarization that consists in the hollowing out of routine occupations accompanied by a quasi-simultaneous rise of non-routine occupations, both high skilled conceptual and manual low skilled ones. This process has been explained by the routinization hypothesis, whereby computer-based technologies allow machines to perform repetitive tasks and replace workers in routine jobs where such tasks are prevalent. In this perspective, structural and occupational changes are naturally interwined with technological change; their understanding can therefore help unravelling the features of new technologies and how they can influence demand for skills. In such a setting, entrepreneurship can play an important role as driver of innovation and employment growth.

Determining the factors driving China's industrial energy intensity: Evidence from technological innovation sources and structural change

This volume analyses the relationship between labour market developments and structural change in five ASEAN countries and Australia. It consists of an overview chapter and six country studies. Drawing on individual country experiences, the overview chapter provides a comparative analysis of how structural change in the five ASEAN countries and in Australia has shaped labour market behaviour. It also describes patterns of labour inflows and outflows, and examines their likely impact on the trade patterns and comparative advantage of ASEAN and Australia. The experiences of individual countries are recounted in six case studies, all of which pay particular attention to the effects of government policy interventions in the labour market.

The effect of structural change on the self-reliance and interdependence of aggregate sectors: the case of Spain, 1980–1994

Quantitative Aspects of the Economic Growth of Nations: VIII. Distribution of Income by Size

This research investigates India's labour market dynamics from 2017 to 2023, emphasizing labour force participation, worker-population ratio, and unemployment rates. Utilizing a mixed- method approach and data from the Directorate General of Employment, the study reveals positive trends, notably an increase in female labour force participation and worker-population ratio, reflecting improved employment opportunities. Unemployment rates declined, suggesting enhanced job prospects. The research highlights gender-specific variations and year-wise trends, offering insights into the evolving labour landscape. Acknowledging data limitations, the study underscores the impact of government policies on employment and inclusivity, contributing to sustainable growth. By exploring themes of sustainability, crisis resilience, and evolving employment patterns, the study enriches the understanding of India's labour market dynamics.

This article examines how the combination of immature welfare state and expansion of the service economy, in particular, contributes to the precariousness of the elderly labour market in South Korea where nearly half of the elderly live below the poverty line. It completes an empirical analysis of how elderly workers in Korea are participating in the labour market and examines their situation using a conceptualisation of “precariousness.” It is explained how the elderly in an immature welfare state are pushed into bad jobs resulting in a large number of precarious “elderly workers” in an economically advanced country. Results of the statistical analysis suggest that, due to severe precariousness, the Korean elderly are unable to escape from poverty even though they work. Also, gender segregation of precariousness in the service industry has been exacerbated in the elderly labour market. Structural change such as the rapid transition to a service-oriented economy has a greater impact on elderly women than middle aged or elderly men because elderly women tend to have lower skill levels and shorter careers, mainly entering service occupations where the bad jobs are concentrated.

Although increasing globalizations spurred rapid industrialization in Malaysia, this article shows that the lack of significant technological upgrading and structural change has caused the premature plateauing of manufacturing, stemming from failures to coordinate policies, enforce standards, sustain high productivity growth and stimulate transition to higher value-added activities. Manufacturing as a whole has registered slow wage growth since the late 1990s, with labour markets characterized by heavy presence of low-skilled foreign workers, increased contract labour and outsourcing and declining worker organization. The focus on perspiration-based low-skilled foreign labour rather than on expanding professional and skilled labour has driven Malaysia down the low industrialization road. The Malaysian experience reflects a case of manufacturing's importance and direct contribution to the economy contracting before recording high levels of value added and sustained productivity growth, and with labour market practices constraining instead of facilitating positive change.

Effects of technological changes on China's carbon emissions

Our interest in the links between civil and military research and development (R&D) arises largely from the importance attached to technological change in explanations of economic growth and in military force planning. The new knowledge and products developed in formal R&D programmes are an important element in the process of technological change, and in both the civilian and military sectors technological change has been a dynamic force for improved performance and structural change. Studies of economic growth in the United States, for example, attribute more than half of the total economic growth since World War I to technological change rather than to simple increases in factor inputs over time(1). On the military side, technological change has, in the years since World War II, transformed force structure and military strategy and fuelled a qualitative arms race.