Technology Choice

The Output and Employment Tradeoff

Bibliographic Data

ID2817534
AuthorsKalman Goldberg (0000-0002-2661-4524, London School of Economics and Political Science), Jannett Highfill (0000-0001-7688-8753, London School of Economics and Political Science), Michael Mcasey (0000-0003-4882-7827, London School of Economics and Political Science)
Year1998
Volume57
Issue1
Pages27-46
Publication date1998-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueAmerican Journal of Economics and Sociology (JOURNAL)
Journal identifiersISSN: 0002-9246 • E-ISSN: 1536-7150
PublisherWiley (PUBLISHER • GB)
DOI10.1111/j.1536-7150.1998.tb03256.x
OpenAlexW1991677610
LanguageEN
Citations received1
References cited7

Suppose, unlike the endogenous growth literature, that technological innovation may actually create structural problems. If capital and labor inputs of specific skill levels are complementary, and new technology changes the skill mix needs, then this mismatch may create underemployment or unemployment. High-tech investment maximizes output but at the expense of unemployment of unskilled workers; lower-tech investment results in smaller unskilled labor unemployment, but a smaller increase in output (or underemployment of skilled labor). A policy solution for this tradeoff is to allocate investment between physical capital and human capital in the right proportions to ensure both maximum output and full employment

Capital (architecture) · Economics · Full employment · Human capital · Investment (military) · Labour economics · Macroeconomics · Market economy · Physical capital · Technological change · Underemployment · Unemployment · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Regional Development and Policy

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