EXPANSION OF THE INFORMATION WORKFORCE - INNOVATION PULL OR AUTOMATION PUSH

This article describes how labor is reallocated from the traditional s ector to the information sector. It also emphasizes that the growth of the information workforce is primarily driven by the synergistic proc ess of information technology innovation (IT). IT innovation affects t he structural change of workforce in two ways: First, it pulls the lab orforce toward the information sector, and second, it pushes the labor force from the traditional sector through automation. This paper tries to determine the causes for this dual effect of IT innovation, its ma gnitude, and the interaction between them by using the two-sector mode l with nonhomothetic preference, which allows high demand elasticity o f the information sector.