Graduation Year

2017

Date of Submission

4-2017

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Ananda Ganguly

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2017 Yuqing "Jenny" Cang

Abstract

Ever since the first Industrial Revolution, during which many textile artisans lost their jobs to weaving machines, the relationship between technological progress and unemployment has been explored and examined by researchers and policy makers. Existing empirical research, mostly at the microeconomic level, has presented ambiguous results. Procuring data on 51 U.S. states for a period of 19 years and a large number of controls, this paper studies the employment effect of technological innovations with a novel state-level macroeconomic analysis. Using commercially-supplied Research and Development expenditure as a proxy, this paper finds that although technological innovations have a non-significant effect on employment at the general state level, there are a few factors that determine how well each state’s labor market responds to technological changes. More specifically, non-urbanized, non-tech-savvy, or states with a large number of workers employed in Manufacturing or Accommodation and Food Services industry experience a more severe unemployment effect than the other states. The results also suggest that unemployment rate is more negatively affected by technological innovations during the Obama Administration, compared with the Clinton and Bush Administration. This paper adds to the limited, macroeconomic literature on technological unemployment, and provides policy makers with important implications on how to prepare citizens for the imminent waves of technological changes.

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