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Abstract

The problem of unemployment in Colombia is very important for a variety of reasons. A large portion of it can be identified as technological unemployment. This kind of unemployment is related to the technological dualism, which exists in the economy. Technological unemployment arises from technological and resource restraints in both sectors, and due to the current composition of effective demand. The traditional sector uses a technology which is relatively labor-intensive, and depends heavily on simple tools produced domestically. In contrast, the modern sector uses imported production processes which are relatively capital-intensive and with a limited degree of flexibility in the substitution of labor for capital. But, labor is abundant, and capital is scarce, in Colombia. Yet, Colombia's consumers seem to prefer a product-mix with a high proportion of goods produced by the modern sector and a relatively low proportion of goods produced by the traditional sector. In providing this product-mix the economy cannot reach full employment of labor. The result is technological unemployment.

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