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Productivity growth, on-the-job search, and unemployment

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  • Miyamoto, Hiroaki
  • Takahashi, Yuya

Abstract

The impact of long-run productivity growth on unemployment is studied. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and Pissarides (1994). Because we include on-the-job search, faster growth reduces unemployment by decreasing job separation and inducing job creation. The incorporation of on-the-job search substantially improves the ability of the Mortensen and Pissarides model to explain the effect of growth on labor market variables. Specifically, our model generates not only an empirically consistent sign of the effect, but also a larger impact of growth on unemployment than the standard matching model.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 58 (2011)
Issue (Month): 6 ()
Pages: 666-680

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Handle: RePEc:eee:moneco:v:58:y:2011:i:6:p:666-680

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Web page: http://www.elsevier.com/locate/inca/505566

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Cited by:
  1. Jean-Baptiste Michau, 2013. "Creative Destruction with On-the-Job Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(4), pages 691-707, October.
  2. Henry R. Hyatt & James Spletzer, 2013. "The Recent Decline in Employment Dynamics," Working Papers 13-03, Center for Economic Studies, U.S. Census Bureau.

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