Impact of technology on employment

Abstract

Employment in any industry is impacted by the introduction of new technology whose objective is to increase productivity. The initial result of such technological introduction is the reduction of workers to some extent. At some point, the productivity from the new technology reaches a plateau. If the business requirements are increasing, it is possible that the firm or industry must start to hire new workers to meet the increased industry demands. The introduction of technological improvements starts the cycle anew. This paper presents a model and empirical data, which illustrates these employment cycles. The data presented in this paper is for several Turkish industries. The analytical model could apply to most industries, but additional empirical data will be needed to very this assertion.