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Total Factor Productivity Growth and Employment: A Simultaneous Equations Model Estimate

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  • MG. Ladu

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    Abstract

    This paper provides a structural estimation of the recent model proposed by Pissarides and Vallanti, a simplified equilibrium model which draws heavily on models with frictions and quasi-rents. The structural model is a system of three equations. The estimation method is a three-stage least squares. My empirical results find that although faster TFP growth temporarily decreases employment, most likely be- cause job destruction reacts faster to schocks than job creation does, after the first year I do not find any statistically significant effect of growth on employment.

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    Bibliographic Info

    Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200506.

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    Date of creation: 2005
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    Handle: RePEc:cns:cnscwp:200506

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    Keywords: total factor productivity; job creation; job de-struction; employment;

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