This report analyzes the contribution of technological change to employment and unemployment. An executive summary emphasizes the importance of technology to U.S. economic welfare and summarizes findings, options, and recommendations. Chapter 1, the introduction, tells of the effect of technological change on employment and presents the organization of the report. Chapter 2 describes the process of technological change. Chapter 3 discusses how technology, labor supply, and labor demand affect the impact of technological change on employment in an open economy. Chapter 4 considers the impact of technological change on employment, wages, and job skill requirements. The employment and economic status of entrants to the labor force and the employment prospects of women and minorities are discussed in Chapter 5. Chapter 6 examines the impacts of technology on the workplace. Chapter 7 discusses public and private policies that affect the adjustment of the economy and the labor force to technological change. Chapter 8 proposes several strategies for further research on technology, employment, and worker adjustment assistance programs and stresses the need to collect data on the diffusion of innovations and their effects on workers and the workplace. Chapter 9 contains the findings of the Panel on Technology and Employment, which developed this report. Chapter 10 presents policy recommendations that emphasize three broad initiatives: public policies to aid worker adjustment, public policies to support the development and application of advanced technologies, and improvements in labor-management cooperation in the adoption of new technologies. The report concludes with a 15-page bibliography. (YLB)