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EMPIRICAL RELATIONSHIP BETWEEN

TECHNOLOGICAL CHANGE AND WAGES


Analysis of empirical trends from the 1980s
gives us facts:
Wage dispersion increased rapidly.
The average returns to education and
experience increased.
The relative supply of college educated
workers increased.
IMPACT OF TECHNOLOGICAL CHANGE AND
DESKILING IN PAKISTAN :
Technology now is used in the majority of workplace
and workers in factories, schools and offices depend
on modern technology.
Workers who do not have high skills will find it difficult
to get a job and they will need to learn new skill,
especially in computer programming and other
advanced technologies.
Herman (2004) states that many manual skills are
not needed because of the new machines which
depend on technology.
TECHNOLOGICAL CHANGE IN AGRICULTURE &
MANUFACTURING SECTOR OF PAKISTAN:
Agriculture is the largest income and employment-
generating sector of Pakistans economy.
A number of researchers including Naqvi et. al.
(1992, 1994) and Mellor (1988) believe that
Agriculture must maintain a growth rate of more than
five percent in order to ensure a rapid growth of
national income
Attaining macroeconomic stability, effective
employment of growing labor force, securing
improvement in distributive justice and a reduction in
rural poverty in Pakistan.
CONTINUED.....
Technical change has been considered as one of the
most important determinants of economic growth.
Accroding to a study, by Karamat Ali and Abdul
Hamid:
They found that technical change was taking place at
a continuous and variable rate.
The major contributor to growth of output and value-
added in both the sectors was capital, which was
contributing over fifty percent.
CONTINOUED.....
Labour share was about 20 percent in the
agricultural sector and about 10 percent in the
manufacturing sector.
Technical change was labour-saving and capital-
using in the manufacturing.
CONTINOUED.......
This is the reason behind the fact that
The manufacturing sector of Pakistan has grown at
an annual rate of about 6.0 percent during 1970s
At 8.7 percent during 1980s, and its share in GDP
has increased from 16.5 percent to about 19 percent,
It has failed to generate new opportunities for the
labour force, so that the employment growth rate is
only about 2 percent.
CONCLUSION......
Technologies have become very important in
physical products, like farm machinery or
agrochemicals.
Speedy growth in such sectors has led to a rapid
development of private firms that make, produce and
sell technology and products based on
agrochemicals.
POLICY IMPLICATIONS.......
Attention should be given to technology and to
training and proper education of human resources.
Technology should be developed according to the
needs of the economy.
The public sector still has a role to play, particularly in
managing the new knowledge, supporting research
to fill up the left over gaps, encouraging and
regulating farmers associations, and ensuring their
effects on the agriculture growth.