Technological unemployment revisited: Automation in a search and matching framework

Arbeitspapier

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 unemployment rate of high-skilled workers. In addition, automation leads to falling wages of low-skilled workers and rising wages of high-skilled workers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Hohenheim Discussion Papers in Business, Economics and Social Sciences ; No. 19-2018

Classification and Topics

• Classification: Wirtschaft ; Bargaining Theory; Matching Theory ; Labor Turnover; Vacancies; Layoffs ; Unemployment: Models, Duration, Incidence, and Job Search ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: unemployment ; automation ; search and matching model ; technological progress ; inequality ; skill premium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cords, Dario ; Prettner, Klaus
• Event: Veröffentlichung
• (who): Universität Hohenheim, Fakultät Wirtschafts- und Sozialwissenschaften
• (where): Stuttgart
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/183112
• URN: urn:nbn:de:bsz:100-opus-15305
• Last update: 10.03.2025, 11:45 AM CET