Innovation and Employment: An Agent-Based Approach (original) (raw)
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Technological innovation is expected to boost economic growth and have a sizable impact on employment. Nevertheless, economic and productivity growth can cast competing forces on labor demand with an ambiguous effect on employment which has been a major preoccupation in developing countries dealing with technical progress and trade liberalization. Furthermore, the impact on employment is likely to be mediated by the kind of innovation introduced. In this regard, the kind of shifts in employment that innovation brings matters for the definition of appropriate labor policies. The objective of this work is to analyze the effect of innovation on labor demand, particularly, the level of employment and the skills composition of the labor force. Thus, we test whether innovation and its different types affect the demand for employment and for skilled labor. The data for this study come from the Innovation Surveys for Uruguayan manufacturing firms over the 2000-2012 period. Our preliminary results for ordinary least squares and instrumental variables and generalized method of moments show positive effects of innovation in the level of total employment and skilled workers. For the share of skilled labor on total employment the evidence is not clear cut, while employment and skilled labor growth seem to be affected positively by innovation. Product innovation exhibit the highest impact on employment but also productivity enhancing innovation has a beneficial effect on employment and skilled labor.
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Jahrbücher für Nationalökonomie und Statistik, 2008
We develop an agent-based macroeconomic model featuring a distinct geographical dimension and heterogeneous workers with respect to skill types. The model, which will become part of a larger simulation platform for European policymaking (EURACE), allows us to conduct ex-ante evaluations of a wide range of public policy measures and their interaction. In particular, we study the growth and labor market effects of various policy types that promote workers' general skill levels. It is examined in how far effects differ if spending is uniformly spread over all regions in the economy or focused in one particular region. We find that the geographic distribution of policy measures significantly affects the effects of the policy even if total spending is kept constant. Focussing training efforts in one region is the worst policy outcome while spreading funds equally across regions generates a larger output in the long-run but not in the short-run. * This research was funded by the European Commission as part of the FP6-STREP project EURACE ('An agent-based software platform for European economic policy design with heterogeneous interacting agents: new insights from a bottom up approach to economic modeling and simulation').
Innovation and Sectoral Employment: A Trade–off between Compensation Mechanisms
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The question whether technological progress displaces employment or whether technological advance is beneficial for the level of employment has been at the core of economic debate for over two centuries. The beneficial effect might be achieved by several compensation mechanisms within the economic system. In this paper we categorize these compensation mechanisms into two basic categories that reflect the different nature of the ideas ruling the compensation. We discriminate the mechanisms of employment despite innovation from employment via innovation. In the context of new innovation economics we model an artificial industry implementing both compensation mechanisms. Simulation analysis is used to examine both the short-run and long-run properties of the model. There we focus on the influence of wage restraint policy on the functioning of the compensation mechanism.
Implications of Technology Development on the Labor Market
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The level of resources invested in STEM, innovation and R&D has never been higher, resulting in new technologies that are promising higher return rates and a new competitive edge. Technology development is influencing the way the work is performed, thus changing the structure of the organization, content of work and demand for workers` skills. Thus, technology development changes industries, organizations and occupations. When occupations are displaced, many workers are forced to reconsider their possibilities at the labor market and to broaden their job perspectives by upgrading their skills portfolio. At the same time, due to the increase in production productivity, new products and services are offered, and new markets emerge. Thus, new jobs are instated and new skills for performing them are required. Technology development led by automation (including AI, ML, etc) and digitalization have found creative and efficient ways to change traditional business models, not necessarily ...