Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/18873
Title: Are labor-saving technologies lowering employment in the banking industry?
Authors: Fung, MK 
Keywords: Banking
Employment
Labor-saving technology
Issue Date: 2006
Publisher: Elsevier
Source: Journal of banking and finance, 2006, v. 30, no. 1, p. 179-198 How to cite?
Journal: Journal of banking and finance 
Abstract: Labor statistics show that the average labor hours per dollar of banking output fell by more than 30% between 1992 and 2002. The proliferation of labor-saving technologies was widely believed to be the major reason. While the first-round effect of a labor-saving technology with a given level of output is a reduction in required labor per unit of output, the second-round effect is a reduction in wage costs that will increase output. Analytically, a given type of labor-saving technology is more likely to have a positive effect on employment if the elasticity of substitution between capital and labor, the price elasticity of demand, and the cost-reducing impact of the new technology are sufficiently large. The main empirical findings of this study are that labor-saving technologies, and the spillovers of these technologies, are associated with higher firm-level employment. These results seem robust to a wide range of specifications and controls.
URI: http://hdl.handle.net/10397/18873
ISSN: 0378-4266
EISSN: 1872-6372
DOI: 10.1016/j.jbankfin.2005.03.008
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