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Technological Learning and Labor Market Dynamics

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  • Martin Gervais
  • Nir Jaimovich
  • Henry E. Siu
  • Yaniv Yedid-Levi

Abstract

The search-and-matching model of the labor market fails to match two important business cycle facts: (i) a high volatility of unemployment relative to labor productivity, and (ii) a mild correlation between these two variables. We address these shortcomings by focusing on technological learning-by-doing: the notion that it takes workers time using a technology before reaching their full productive potential with it. We consider a novel source of business cycles, namely, fluctuations in the speed of technological learning and show that a search-and-matching model featuring such shocks can account for both facts. Moreover, our model provides a new interpretation of recently discussed “news shocks.”

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19767.

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Date of creation: Dec 2013
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Handle: RePEc:nbr:nberwo:19767

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Technological Learning and Labor Market Dynamics
    by Christian Zimmermann in NEP-DGE blog on 2014-01-12 20:40:50
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Cited by:
  1. Nir Jaimovich & Henry E. Siu, 2012. "The Trend is the Cycle: Job Polarization and Jobless Recoveries," NBER Working Papers 18334, National Bureau of Economic Research, Inc.
  2. Sergio A. Lago Alves, 2012. "Trend Inflation and the Unemployment Volatility Puzzle," Working Papers Series, Central Bank of Brazil, Research Department 277, Central Bank of Brazil, Research Department.

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