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Creative Destruction with On-the-Job Search

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  • Jean-Baptiste Michau

    (Ecole Polytechnique)

Abstract

This paper studies the consequences of creative destruction on unemployment in a frictional labor market with on-the-job search. For a benchmark calibration, a 1% increase in growth raises the unemployment rate by 1.72 percentage points in the economy without on-the-job search and by only 0.07 percentage points with on-the-job search. Rather than contributing to unemployment through more frequent job separations, in the presence of on-the-job search, creative destruction induces a direct reallocation of workers from low to high productivity jobs. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2012.10.011
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 16 (2013)
Issue (Month): 4 (October)
Pages: 691-707

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Handle: RePEc:red:issued:11-119

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Keywords: Creative destruction; Obsolescence; On-the-job search; Unemployment;

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  1. Jean-Baptiste Michau, 2013. "Creative Destruction with On-the-Job Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(4), pages 691-707, October.
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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, Elsevier for the Society for Economic Dynamics, vol. 16(4), pages 691-707, October.
  2. Henry Hyatt & James Spletzer, 2013. "The recent decline in employment dynamics," IZA Journal of Labor Economics, Springer, Springer, vol. 2(1), pages 1-21, December.
  3. Jean-Baptiste Michau, 2009. "Unemployment insurance and cultural transmission: theory and application to European unemployment," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 28605, London School of Economics and Political Science, LSE Library.
  4. Hiroaki Miyamoto & Yuya Takahashi, 2008. "Productivity Growth, On-the-Job Search, and Unemployment," Working Papers, Research Institute, International University of Japan EMS_2011_06, Research Institute, International University of Japan, revised Feb 2011.

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