The modern labour market is constantly under pressure from globalization, technological change and other factors that changes the task content. Therefore, the modern labor force has to be flexible, able to adapt and face these changes. This has a big effect on the modern economy which relies on a well-functioning labour market. The main purpose of this paper is to exploit how technological change has affected the Danish labour market. This subject has lately gained a lot of attention due to the rapid acceleration of the usage of new technology and emerging international evidence on how technological change favors high skilled workers and thereby changes the labour market.
First of all, a broad summary of excisting literature is presented in order cover the implications researchers already has found. In brief they generally find that technological change is the reason why labour markets throughout the world has experienced a rising degree of polarization. This does not lead to any negative effects on the overall employment level, but only displacement effects between different types of skill leveled workers. The last tendency the excisting literature shows, is that technological change has led to a rising inequality, since high skilled workers has experienced a raise in the relative wage level.
The evidence from the excisting literature together with the theoretical part, creates the foundation of the analytical part. Since it hasn’t been possible to create a regression analysis, the remarks from the analysis should only be seen as possible implications of the technological progress. The result of this paper shows that the Danish labour market has been facing the same polarization, as the rest of Europe, during the examined period 1995-2015. This could possibly be because of the rapid use of ICT which is associated with a polarizing effect. The overall employment level has throughout the period been rising which could be explained by the technological change creating new tasks. Throughout the period there has been a rising inequality in Denmark, which could be explained due to the fact, that new technology favors high skilled workers. Therefore, the main findings of this paper do correspond with the results shown in the excisting literature on how technological change effects the labour market. The technological change has overall not affected the labour market negatively, only created displacement effects.