Technology and the Decline in Demand for Unskilled Labour : A Theoretical Analysis of the US and European Labour Markets

The position of low skilled workers in the labour market has deteriorated significantly over the past three decades. What has caused this deterioration in low skilled labour demand and what can explain the different labour market responses throughout the OECD? Mark Sanders addresses these questions and evaluates proposed policies to improve upon the present situation and prevent further deterioration in the future. The author develops a theoretical framework that produces two hypotheses to explain the shift in relative demand as well as the different ways in which this shift has manifested itself. The framework is then extended by introducing unemployment, and additional hypotheses are proposed to explain the main EU-US differences. The dynamics thus uncovered yield somewhat unorthodox policy implications on income-, labour market and technology policies in Europe and the US. This comprehensive book will appeal to both scholars and academics, whilst graduate and PhD-students looking for an accessible introduction to modelling the dynamics of technical change and its interactions with the labour market will find it of great interest.