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Innovation and Sectoral Employment: A Trade–off between Compensation Mechanisms
Author(s) -
Ebersberger Bernd,
Pyka Andreas
Publication year - 2002
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/1467-9914.00211
Subject(s) - compensation (psychology) , context (archaeology) , mechanism (biology) , economics , labour economics , categorization , wage , technological change , core (optical fiber) , industrial organization , economic system , macroeconomics , computer science , psychology , paleontology , telecommunications , philosophy , epistemology , artificial intelligence , psychoanalysis , biology
The question whether technological progress displaces employment or whether technological advance is beneficial for the level of employment has been at the core of economic debate for over two centuries. The beneficial effect might be achieved by several compensation mechanisms within the economic system. In this paper we categorize these compensation mechanisms into two basic categories that reflect the different nature of the ideas ruling the compensation. We discriminate the mechanisms of employment despite innovation from employment via innovation . In the context of new innovation economics we model an artificial industry implementing both compensation mechanisms. Simulation analysis is used to examine both the short–run and long–run properties of the model. There we focus on the influence of wage restraint policy on the functioning of the compensation mechanism.