Controversies on the impact of modern technologies on employment and unemployment

Abstract

This paper aims to identify recent labor market changes brought about by modern technology. The analysis, which is based on the theoretical and empirical findings in the economic literature, indicates that a task-content approach to labor demand enables the channels through which modern technology affects both the size and structure of the demand for labor to be more clearly and accurately identified. This especially applies to the displacement effect, the productivity effect, and the effect of creating new tasks. Attention is drawn to the possibility of modern technology segmenting the labor market. Empirical research conducted in numerous countries has not borne out the alarmist predictions about modern technology resulting in high technological unemployment. Changes in the structure of labor demand are evident, although the available data show that COVID-19, after the initial shock to the labor market, has not brought about any revolutionary changes in the size or structure of the demand for labor.

Keywords

• modern technologies
• changes in the size and structure of the demand for labor
• task-content approach to analyzing labor demand