Embodied and disembodied technological change: The sectoral patterns of job-creation and job-destruction

Abstract

This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a two-sector economy. Disembodied technological change turns out to positively affect employment dynamics in the “upstream” sectors, while expansionary investment does so in the “downstream” industries. However, these labour-friendly impacts are barely significant from a statistical point of view. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand and this effect turns out to be highly significant.