Innovation, Popularization of Higher Education and Employment

The paper investigates the relationship between the technological progress and labour market outcomes. Technological progress (innovation) may alter the required quality and quantity of labour for production. The impact on employment depends on the characteristic of the new production technology. On the one hand, if the technological progress is complementary to workers (the labour-intensive technological progress), employment tends to be increased by the technological change. On the other hand, the new technology serves to substitute for workers (the labour-saving technological progress), it tends to decrease employment. However, technological progress doesn’t always have the same impacts on all types of workers. The paper examines how technological changes affect the wage, employment and unemployment in the dual labour market framework.