The paper considers the macroeconomic relationships between employment, technology and growth, focusing on the role of internal demand component and income distribution.
The debate on the technological causes of the jobless growth and on the intensity of the well-known compensation mechanisms is considered from this point of view.
It is argued that the recent growth path of the industrialised economies, started at the beginning of the eighties, does not show the rise in its employment intensity pointed out by some authors. The evidence seems to suggest, on the contrary, a decrease in the ratio between employment growth and value added growth - both at the aggregate and sectoral level - for many European countries, in particular since the second half of the eighties and nineties.
The virtuous circle between demand growth and productivity growth favourable to employment dynamics, which characterised the sixties and seventies, does not emerge anymore in the last fifteen years, when a negative relation between employment dynamics and productivity growth appears.
On the basis of some empirical research adopting the cumulative growth model of the "regulation school" (with internal and external causation mechanisms) for the period 1960-1990, this change seems to be explained by the decreased intensity of endogenous compensation mechanisms, such as changes in income distribution, and changes in important macroeconomic relationships between investment, consumption, and net export.
Finally, the paper proposes a quantitative assessment for the more recent years (1991-1995) of the impact of demand side factors, i.e. growth, composition and distribution of income, on the determination of changes in the aggregate balance of employment.
The level of employment warranted in a system is here derived from the application of a simple scheme which we have called, following the contributions of Richard Kahn and John Maynard Keynes, the "employment multiplier". Starting from an accounting identity between the values of aggregate supply and demand, a level of "warranted" employment is derived, given the labour coefficient and the deflated values of final demand, in which autonomous components are distinguished from an induced component, this latter depending on total labour income.
Thus, the variations of aggregate employment for a country can be decomposed into the effects of the contributions of three components:
growth of average productivity of labour, growth of "autonomous" demand components, and variations of the "multiplier", a term which summarises the impact of wage share and consumption propensity on induced demand and again on the level of overall employment