Innovation and Employment: A Survey
22 Pages Posted: 11 Mar 2007
Date Written: February 2007
According to the compensation theory, market forces should assure a complete compensation of the initial labour-saving impact of process innovations. In this paper a critique of this approach is proposed through a detailed survey of the theoretical and empirical literature on the subject. The general conclusion is that - although compensation is always working - the complete counter-balancing of dismissed workers cannot be assumed ex-ante.
Keywords: innovation, technological unemployment, compensation
JEL Classification: J64, O33
Suggested Citation: Suggested Citation