Blockchain innovation in promoting employment

TL;DR

This paper explores how blockchain technology can improve labor market efficiency and employment through government policies, using an extended economic model to analyze its impact and barriers.

Contribution

It introduces an extended DMP model incorporating government intervention to analyze blockchain's role in labor markets and employment growth.

Findings

Lowering firm taxes accelerates blockchain innovation.

Blockchain improves job matching and reduces unemployment.

Government policies are crucial for fostering blockchain adoption.

Abstract

Blockchain technology, though conceptualized in the early 1990s, only gained practical relevance with Bitcoin's launch in 2009. Recent advancements have demonstrated its transformative potential, particularly in the digital art and global payment sectors. Non-fungible tokens (NFTs) have redefined digital ownership, while financial institutions use blockchain to enhance cross-border transactions, reducing costs and settlement times. Using the Diamond-Mortensen-Pissarides (DMP) model, this paper examines blockchain's impact on labor markets by improving job-matching efficiency, thereby reducing unemployment. However, high research costs and competition with incumbent technologies hinder early-stage blockchain adoption. We extend the DMP model to analyze the role of government intervention through tax and wage policies in mitigating these barriers. Our findings suggest that lowering firm tax rates can accelerate blockchain innovation, enhance labor market efficiency, and promote employment growth, highlighting the critical balance between technological progress and economic policy in fostering blockchain-driven economic transformation.