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ResearchPaper
2018

Technological unemployment revisited

automation in a searchand matching framework

Abstract (English)

Will low-skilled workers be replaced by automation? To answer this question, we set up a search and matching model that features two skill types of workers and includes automation capital as an additional production factor. Automation capital is a perfect substitute for low-skilled workers and an imperfect substitute for high-skilled workers. Using this type of model, we show that the accumulation of automation capital decreases the labor market tightness in the low-skilled labor market and increases the labor market tightness in the high-skilled labor market. This leads to a rising unemployment rate of low-skilled workers and a falling un- employment rate of high-skilled workers. In addition, automation leads to falling wages of low-skilled workers and rising wages of high-skilled workers.

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Publication license

Publication series

Hohenheim discussion papers in business, economics and social sciences; 2018,19

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Faculty

Faculty of Business, Economics and Social Sciences

Institute

Institute of Economics

Examination date

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ISBN

Language

English

Publisher

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Classification (DDC)

330 Economics

Original object

Free keywords

Unemployment Automation Search and matching model Technological progress Inequality Skill premium

Sustainable Development Goals

BibTeX

@techreport{Prettner2018, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6310}, author = {Prettner, Klaus and Cords, Dario}, title = {Technological unemployment revisited : automation in a searchand matching framework}, year = {2018}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }

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