The Impact of Technological Growth and Education Spending on Unemployment: Evidence From a Panel ARDL-PMG Approach

Yıl 2021, Cilt: 10 Sayı: 2, 1 - 22, 01.12.2021

Volkan Han

Öz

Purpose: The aim of this study is to examine the short and long-term effects of technological development variables
(R&D expenditures, high technology exports and patent applications) and public education expenditures on unemployment using the ARDL-PMG approach.
Methodology: Panel Ardl model, which is known as an error correction model and allows the diagnosis of short-and
long-term relationships, is used. Do technological advances cause the unemployment rate to rise? And Is there a link
between technological advances, expenditure on education and employment? In this study, which tries to answer these
two questions, ARDL and DH panel causality tests were applied for the European Union.
Findings: According to the Panel ARLD-PMG analysis findings, while R&D spending increases unemployment in the short
term, a 1% increase in R&D spending decreases unemployment by 1.42% over the long term. Similarly, a 1% increase
in education expenditure decreases unemployment by 0.165% over the long term. Also, R&D spending and high technology exports have bidirectional causation, and bi-directional causality has been identified between unemployment and
education expenditures.
Practical Implications: While the widespread use of Industry 4.0 provides significant job savings, it creates pressure
on employment. Policymakers should set more careful policies to support employment. The possibility of technological
unemployment spreading can cause individual and social instabilities and problems.
Originality: The contribution of the study to the literature allows us to see the effectiveness of public education expenditures while determining the effect of technological developments on unemployment.

Anahtar Kelimeler

Technological Unemployment, Industry 4.0, Panel ARDL-Pmg, Panel Causality Test.

Teknolojik Büyüme ve Eğitim Harcamalarının İşsizlik Üzerine Etkisi: Panel ARDL-PMG Yaklaşımından Kanıtlar

Öz

Amaç: Bu çalışmanın amacı teknolojik gelişme ölçütleri (Ar-Ge harcamaları, yüksek teknoloji ihracatı ve patent başvuruları) ve kamu eğitim harcamalarının işsizlik üzerine kısa ve uzun vadeli etkilerini ARDL-PMG yaklaşımı kullanarak
incelemektir.
Metodoloji: Hata düzeltme modeli olarak bilinen, kısa ve uzun dönemli nedensellik ilişkilerinin teşhisine olanak sağlayan
Panel Ardl modeli kullanılmaktadır. Teknolojik gelişmeler işsizlik oranının artmasına neden oluyor mu? Teknolojik ilerlemeler, eğitim harcamaları ve istihdam arasında bir bağlantı var mı? Bu iki soruya cevap bulmaya çalışan bu çalışmada, Avrupa
Birliği için ARDL ve DH panel nedensellik testleri uygulanmıştır.
Bulgular: Panel ARLD-PMG analiz bulgularına göre Ar-Ge harcamaları kısa dönemde işsizliği artırırken, uzun dönemde
Ar-Ge harcamalarındaki %1’lik bir artış işsizliği %1,42 oranında azaltmaktadır. Benzer şekilde, eğitim harcamalarındaki
%1’lik bir artış, işsizliği uzun vadede %0,165 oranında azaltmaktadır. Ayrıca, Ar-Ge harcamaları ve yüksek teknoloji
ihracatı çift yönlü nedenselliğe sahiptir ve işsizlik ile eğitim harcamaları arasında çift yönlü nedensellik tespit edilmiştir.
Sonuç ve Öneriler: Endüstri 4.0’ın yaygınlaşması önemli iş tasarrufları sağlarken, istihdam üzerinde baskı yaratıyor.
Politika yapıcılar, istihdamı desteklemek için daha dikkatli politikalar belirlemelidir. Teknolojik işsizliğin yayılma olasılığı,
bireysel ve sosyal istikrarsızlıklara ve sorunlara neden olabilir.
Özgün Değer: Çalışmanın literatüre katkısı, teknolojik gelişmelerin işsizlik üzerindeki etkisini belirlerken kamu eğitim
harcamalarının etkinliğini görmemizi sağlamaktadır.

Anahtar Kelimeler

Teknolojik İşsizlik, Endüstri 4.0, Panel ARDL-Pmg, Panel Nedensellik Testi.

Kaynakça

• Acemoglu, D. (1997a). Training and innovation in an imperfect labour market. The Review of Economic Studies, 64(3), 445-464.
• Acemoglu, D. (1997b). Technology, unemployment and efficiency. European Economic Review, 41(3-5), 525-533.
• Acemoglu, D. (2002). Technical change, inequality, and the labor market. Journal of economic literature, 40(1), 7-72. Antonucci, T., and Pianta, M. (2002). Employment effects of product and process innovation in Europe. International Review of Applied Economics, 16(3), 295-307.
• Attiaoui, I., Toumi, H., Ammouri, B. et al. Causality links among renewable energy consumption, CO2 emissions, and economic growth in Africa: evidence from a panel ARDL-PMG approach. Environ Sci Pollut Res 24, 13036–13048 (2017).
• Betz, F. (2003). Managing technological innovation: competitive advantage from change. John Wiley and Sons.
• Bogliacino, F., and Pianta, M. (2010). Innovation and employment: a reinvestigation using revised Pavitt classes. Research Policy, 39(6), 799-809.
• Bogliacino, F., Piva, M., and Vivarelli, M. (2012). R&D and employment: An application of the LSDVC estimator using European microdata. Economics Letters, 116(1), 56-59.
• Brynjolfsson, E., and McAfee, A. (2014). The second machine age: Work, progress, and prosperity in a time of brilliant technologies. WW Norton and Company.
• Chennells, L., and Van Reenen, J. (2002). Technical change and the structure of employment and wages: A survey of the microeconometric evidence. Productivity, Inequality and the Digital Economy, MIT Press, Cambridge, MA, 175-223.
• Ciriaci, D., Moncada-Paternò-Castello, P., and Voigt, P. (2016). Innovation and job creation: a sustainable relation?. Eurasian Business Review, 6(2), 189-213.
• Coad, A., and Rao, R. (2011). The firm-level employment effects of innovations in high-tech US manufacturing industries. Journal of Evolutionary Economics, 21(2), 255-283. and Economic.
• Davis, D. R. (1998). Technology, unemployment, and relative wages in a global economy. European Economic Review, 42(9), 1613-1633.
• Dumitrescu, E. I. and Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460, doi.org/10.1016/j.econmod.2012.02.014
• Evangelista, R., and Vezzani, A. (2012). The impact of technological and organizational innovations on employment in European firms. Industrial and Corporate Change, 21(4), 871-899.
• Evangelista, R., Guerrieri, P., and Meliciani, V. (2014). The economic impact of digital technologies in Europe. Economics of Innovation and new technology, 23(8), 802-824.
• Fagerberg, J., Verspagen, B., and Caniels, M. (1997). Technology, growth and unemployment across European regions. Regional Studies, 31(5), 457-466.
• Feldmann, H. (2013). Technological unemployment in industrial countries. Journal of Evolutionary Economics, 23(5), 1099-1126.
• Ford, M. (2015). Rise of the Robots: Technology and the Threat of a Jobless Future. Basic Books.
• Greenan, N. (2003). Organisational change, technology, employment and skills: an empirical study of French manufacturing. Cambridge Journal of economics, 27(2), 287-316.
• Greenan, N., and Guellec, D. (2000). Technological innovation and employment reallocation. Labour, 14(4), 547-590.
• Hall, B. H., Lotti, F., and Mairesse, J. (2008). Employment, innovation, and productivity: evidence from Italian microdata. Industrial and corporate change, 17(4), 813-839.
• Harrison, R., Jaumandreu, J., Mairesse, J., and Peters, B. (2014). Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries. International Journal of Industrial Organization, 35, 29-43.
• Im, K. S., Pesaran, M. H. and Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1): 53-74, doi.org/10.1016/S0304-4076(03)00092-7
• Keynes, J. (2016). Essays in persuasion. Springer.
• Kim, Y. J., Kim, K., and Lee, S. (2017). The rise of technological unemployment and its implications on the future macroeconomic landscape. Futures, 87, 1-9.
• Kwon, S. J., Park, E., Ohm, J. Y., and Yoo, K. (2015). Innovation activities and the creation of new employment: An empirical assessment of South Korea’s manufacturing industry. Social Science Information, 54(3), 354-368.
• Lachenmaier, S., and Rottmann, H. (2011). Effects of innovation on employment: A dynamic panel analysis. International journal of industrial organization, 29(2), 210-220.
• Marx, K. (1963). Theories of Surplus-value (volume IV of Capital). Foreign Languages Publishing House.
• Mastrostefano, V., and Pianta, M. (2009). Technology and jobs. Economics of innovation and new technology, 18(8), 729-741.
• Matuzeviciute, K., Butkus, M., and Karaliute, A. (2017). Do technological innovations affect unemployment? Some empirical evidence from European countries. Economies, 5(4), 48.
• Mortensen, D. T., and Pissarides, C. A. (1998). Technological progress, job creation, and job destruction. Review of Economic dynamics, 1(4), 733-753.
• Onuoha, F. C., and Moses Oyeyemi, A. (2019). Impact of disagregated public expenditure on unemployment rate of selected african countries: A panel dynamic analysis. Journal of Economics, Management and Trade, 1-14.
• Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels (Cambridge Working Papers in Economics No. 0435). Retrieved from https://doi.org/10.1007/s00181-020-01875-7
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312, doi.org/10.1002/jae.951
• Pesaran, M. H., Shin, Y., and Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
• Pesaran, M. H., Shin, Y., and Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American statistical Association, 94(446),621-634.
• Pirim, Z., Owings, W. A., and Kaplan, L. S. (2014). The long-term impact of educational and health spending on unemployment rates. European Journal of Economic andPolitical Studies, 7(1).
• Piva, M., and Vivarelli, M. (2004). Technological change and employment: some micro evidence from Italy. Applied Economics Letters, 11(6), 373-376.
• Postel‐Vinay, F. (2002). The dynamics of technological unemployment. International Economic Review, 43(3), 737-760.
• Ricardo, D. (1821). On the principles of political economy. London: J. Murray.
• Say, J. B. (1821). A treatise on political economy; or, The production, distribution, and consumption of wealth. Tr. by CR Prinsep, with notes (Vol. 1).
• Schumpeter, J. (1942). Creative destruction. Capitalism, socialism and democracy, 825, 82-85.
• Spiezia, V., and Vivarelli, M. (2002). Innovation and employment: A critical survey. Greenan, N.-L’Horty Y.-Mairesse, J.(eds.), Productivity, Inequality and the Digital Economy: A Transatlantic Perspective, MIT Press, Cambridge (Mass.), 101-31.
• Van Roy, V., Vértesy, D., and Vivarelli, M. (2018). Technology and employment: Mass unemployment or job creation? Empirical evidence from European patenting firms. Research Policy, 47(9), 1762-1776.
• WDI: World Development Indicators. https://datacatalog.worldbank.org/dataset/world-development-indicators
• Yildirim, D. Ç., Yildirim, S., Erdogan, S., and Kantarci, T. (2020). Innovation—Unemployment Nexus: The case of EU countries. International Journal of Finance