Towards a Theory of Technological Mismatch

In this paper, the relationship between technological change and employment is analysed using private consumption as a means to do so. Technological change will create new and more consumption opportunities by means of product and process innovation. This results in changes in consumption patterns and budget shares of consumer products. As a consequence of technological change and changing tastes, the production structure will be altered and therefore, changes in (the composition) of employment are inevitable. By using a narrow classification of products as well as occupations, it is possible to analyse the dynamics of adjustment and technological change and their impact on the composition of employment in terms of occupations/skills. Furthermore, obsolescence of products and skills, caused by technological change, can be related to each other by using an input-output framework. The decrease in the (real) consumption of industrial consumer goods has for instance lead to a decrease in the employment of industrial occupations. In addition, scientific/professional occupations seems to have replaced industrial occupations between 1980 and 1990 in the Netherlands. The development of information technology may be a reason for the relative decrease in the employment of commercial skills. Introduction