Developing economies face unique labor market challenges post-technology shocks.
The article explores how technology shocks affect labor markets in developing countries differently than in advanced economies. By analyzing data and using a simple model, the researchers found that in developing economies, the response of hours worked and employment to technology shocks is smaller. They also discovered that factors related to subsistence consumption play a significant role in explaining these differences. The study suggests that adding subsistence consumption to a standard economic model can help explain the unique labor market dynamics in developing economies during business cycle fluctuations.