When does labor scarcity encourage innovation?
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Acemoglu_When does.pdf
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312.98 KB
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Author(s)
Acemoglu, Daron
Date Issued
October 2010
Journal
Journal of Political Economy
Publisher
University of Chicago Press
Citation
Acemogulu, Daron. "When does labor scarcity encourage innovation?" Journal of Political Economy, Vol. 118, No. 6, December 2010.
Version
Author's final manuscript
Abstract
This paper studies whether labor scarcity encourages technological advances, i.e., technology adoption or innovation, for example, as claimed by Habakkuk in the context of 19th-century United States. I define technology as strongly labor saving if technological advances reduce the marginal product of labor and as strongly labor complementary if they increase it. I show that labor scarcity encourages technological advances if technology is strongly labor saving and will discourage them if technology is strongly labor complementary. I also show that technology can be strongly labor saving in plausible environments but not in many canonical macroeconomic models.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Creative Commons Attribution-Noncommercial-Share Alike 3.0
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DOI of Published Version
http://dx.doi.org/10.1086/658160
https://doi.org/10.1086/658160
