Unemployment and the Structure of Labor Demand

One of the most inaonc~lusive debates in the history of American academic economics is the debate over the impact of structural shifts in the economy on employment conditions. Beginning in the late 1950’s Charles Killingsworth and others argued that rising unemployment rates were in part due to structural shifts in the economy.1 Eckstein, Heller, Knowles, Kalachek, and Gordon, among others, vociferously denied the importance of these structural shifts for the labor market and argued that lagging aggregate demand was the culprit.2 The debate has been fought to a draw. Neither side has budged from its original position, and both sides claim definitive proof that their opponents are wrong. Some of the prominent &dquo;aggregate-demanders&dquo; have displayed a curious inability to understand what the structuralists were saying. The structuralists, on the other hand, have developed few specifically testable and &dquo;brittle&dquo; hypotheses, and have produced little hard research to support their position.