ABSTRACTThe information-based new technologies become central to most aspects of
economic activity. But the extent to which information technology creation and
diffusion contribute to the labor market performance is still on the controversial. The
dev...
ABSTRACTThe information-based new technologies become central to most aspects of
economic activity. But the extent to which information technology creation and
diffusion contribute to the labor market performance is still on the controversial. The
developed countries characterized by rapid technological advance face high
unemployment rates, weak employment growth and rising wage inequalities. In the
US and UK etc, workers are confronted by the falling real wages, growing shares of
low wage jobs, sharply growing earnings inequality, and declining job benefits and
job security. On the other hand, Workers in continental Europe suffer from the labor
market that produced too few jobs.These facts have been usually explained by 'technology-induced skill mismatch'
theory. They argue, the spectacular growth in earnings inequality in US and the
rising unemployment rates in continental Europe can be accounted for by shifts in
demand by employers from low skilled towards high-skilled workers. Futhermore,
this argument has been followed by the more labor market flexibility to utilize the
potential of new technologies.I argue, however, that the demand shift alone cannot explain the change of labor
market. Many employers' 'low-wage human resource strategies' led to the growth of
inequality. Also, the improvement in the function of labor market is necessary, but
labor market flexibility do not guarantee, in themselves, that the human resource
development will suffice to meet the job-creating needs of knowledge-based growth.