Browsing by Subject "Technological change"

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Generalized barriers to entry and economic development
(2009) Pyka, Andreas; Saviotti, Pier Paolo
In this paper we are going to analyze the dynamics of barriers to entry at the international level. In our model economic development takes place and continues in the long run due to the emergence of new sectors, which can compensate for the diminishing ability of mature sectors to create employment and growth. Each new sector is created by a pervasive innovation, which creates a new market and into and out of which there are entry and exit of firms. Depending on the inter-temporal coordination of the maturation of older sectors and of the maturation of new ones our model can give rise to development paths with growth rates ranging from high to negative, to fluctuations, to bubbles and to chaos. In the construction of our model we found inspiration in a number of growth models, both endogenous and evolutionary as well as on empirical work on structural change. The model also bears some similarity of style to history friendly models. Its unique feature is that it gives rise to an endogenously variable number of sectors. Unless new sectors are exact substitutes of older ones the model gives rise to growing variety. In fact, the main objective for which the model was initially constructed was to test some propositions implying that variety growth is a necessary requirement for long term economic development. Within our model the ability to create new sectors at the right times is the crucial determinant of the growth potential of an economic system. Thus, inter country differences in the barriers to entry into new sectors can be expected to give rise to different rates of growth and in the end to increasingly skewed world income distribution.
Service offshoring and the demand for less-skilled labor : evidence from Germany
(2007) Schöller, Deborah
Besides material offshoring, economists have started to analyze the impact of service offshoring on domestic employment. Services are of particular interest since their significance has grown in terms of both quantity and quality. One decade ago, most services were considered non-tradable, but the emergence of new information and communication technologies has contributed to overcoming geographical distance. The move towards the liberalization of international service trade has further accelerated this process. The empirical part of this paper first calculates German service offshoring intensities on a sectoral basis using input-output data. This measurement represents the proportion of imported service inputs used in home production. Germany?s average service offshoring intensity more than doubled from 1991 to 2003. In a next step, the impact of service offshoring on the demand for heterogeneous labor in Germany is estimated at a sectoral level including 28 manufacturing sectors. The partial static equilibrium model is based on a variable unit cost function in the general translog form allowing for quasi-fixed input factors. Two different skill-levels are taken into account. The estimation results indicate that service offshoring reduced the relative demand for less-skilled labor in the German manufacturing sectors by on average -0.06 to -0.16% per year between 1991 and 2000.
Three essays on the labor market effects of technological change and unemployment benefits
(2023) Brall, Franziska; Beißinger, Thomas
The dissertation essentially contributes to the discourse on how technological change and a reduction in unemployment benefits affect the labor market. The thesis incorporates an empirical analysis of the influence of automation technologies on wage inequality in Germany. Additionally, the dissertation introduces a novel general equilibrium model to analyze the impact of technological change on the wage setting behavior of labor unions and reevaluate the labor market effects of a cut in unemployment benefits. The first essay contributes to the existing literature in examining the relative importance of automation technologies on wage inequality in the German manufacturing sector between 1996 and 2017. The analysis introduces a novel measure of automation threat, combining occupation- and requirement-specific scores of automation risk with sector-specific robot densities. Using the RIF-based Oaxaca–Blinder decomposition method, the analysis demonstrates that automation threat significantly contributes to wage inequality, in addition to the commonly used demographic factors. On the one hand, there is an observable trend towards occupations with medium automation threat, accompanied by decreasing shares of occupations with high and low automation threat. Due to the fact that within-group wage inequality is the lowest in the group with the highest automation threat, those compositional changes contribute to increasing wage inequality. On the other hand, an increasing wage dispersion between occupations with low automation threat (containing especially non-routine tasks) and occupations with high automation threat (containing especially routine tasks) contributes to rising wage inequality. This is in line with the predictions of routine-biased technical change, where technology particularly substitutes routine tasks. The second essay develops a novel modeling framework for the analysis of skill-biased technical change (SBTC), combining the task approach, wage setting by labor unions, as well as search and matching frictions. The important insight from this analysis is that changes in the firm’s assignment of tasks to low- and high-skilled workers have an impact on the wage setting power of labor unions. The effect of such a change in the task allocation on the labor demand elasticity, and consequently on the labor union’s wage markup, is ambiguous. This has consequences for the effects of SBTC. Unlike the conventional result that SBTC has a positive impact on employment and wages of low-skilled workers, the task-based matching model presents the possibility that low-skilled workers may instead experience either higher unemployment or lower real wages. The model is calibrated to German and French data for the periods 1995-2005 and 2010-2017 to illustrate that the impact of SBTC may even change its sign over time. The results depend on the shape of the task productivity schedule, which reflects the substitutability of high-and low-skilled workers. The third essay revisits the labor market effects of a reduction in unemployment benefits using a modified version of the previously developed task-based matching model. The analysis demonstrates that a cut in low-skilled unemployment benefits triggers a reallocation of tasks towards low-skilled workers. This leads to additional effects on labor market outcomes that are disregarded in the prevailing literature. To highlight the importance of endogenous task allocation, the task-based matching model with exogenous and constant task allocation is considered. Both model variants are calibrated to analyze the effects of the Hartz IV reform in Germany, which involved a substantial cut in unemployment benefits. The calibration reveals a remarkable decrease in the low-skilled unemployment rate by 4 percentage points resulting from Hartz IV. In the case of exogenous and constant task allocation, the decline is limited to 3.4 percentage points, but there are stronger effects on low- and high skilled wages, causing wage inequality to rise more sharply. The results emphasize the importance of considering endogenous task allocation in the evaluation of labor market reforms.