IMPORTANCE AND ROLE OF TECHNOLOGICAL PROGRESS ON JOB CREATION: AN EVIDENCE FOR TURKEY

Sibel CENGİZ

Afşin ŞAHİN

It can be seen since the Industrial Revolution that the advancing technology has caused big changes in the society and economics. Following the Industrial Revolution, it is always debated among scholars whether the mechanization in production increases the unemployment or not which is a socio-economic problem. Today robots and artificial intelligence show themselves in the society more and unemployment increases in the worldwide deepen these debates. Classical Economics School representatives emphasized that the technological unemployment would not be long-termed and job losses would be balanced by compensatory mechanisms. In most of the studies, the effects of technological progress and innovation on employment is found to be negative but in the long-term because of the increasing quality of the goods and services and decreasing costs their effects turn to be positive. In this study, the effects of technological progress on the employment for Turkey during the period 1990-2018 is analyzed using Quantile Regression method and it is tried to be determined whether it will increase the unemployment rate through labour saving or decrease the unemployment through compensatory mechanisms. Unemployment rate is taken as a dependent variable and change in the Research-Development expenditures and economic growth are taken as independent variables. There is found to be a negative relationship between unemployment and Research-Development expenditures. 1% increase in the Research and Development expenditures decrease the unemployment rate by 5.73%. However, there is no significant relationship between economic growth and unemployment and may point out a jobless growth case. This may be because of the economic growth with labour saving production methods. Consequently, in the Turkish economy, Research and Development expenditures as expected increases labour productivity but the unemployment problem following labour saving production methods would be balanced by structural measures.        

Key Words: Technological change, Unemployment, Employment, Innovation, Quantile Regression.

Jel Codes: J64, 033.