Does technical progress create unemployment?

Political opposition to technical change is not a new phenomenon; at the plant level, organised labour has often resisted implementation of new technologies, as is exemplified by the Luddites in the nineteenth century, the dockers' strikes against the use of containers in Britain in the early 1970s, or the pervasiveness of various union work rules that impose minimum unit labour requirements on production. At the national level, it is customary to hear complaints that new technologies increase unemployment as growth fails to absorb the larger output potential they generate. This feeling that technical progress destroys jobs because output cannot follow is closely connected, in its logic, with popular recipes against unemployment such as working time reduction or pre-retirement schemes. For example, the French Employment Minister, Martine Aubry, recently declared to the press that working time reduction should be large and quick enough in order to prevent productivity growth from offsetting its supposedly positive effects on employment. On the other side of the debate, economists have always had a hard time finding rigorous foundations for these views, and tend to consider that technical progress is neutral, as far as unemployment is concerned, or that, if anything, it is favourable for employment. This paper reviews some theoretical arguments and empirical evidence about the effect of technical change on unemployment.