On the impact of the TFP growth on the employment rate: does training on-the-job matter?
AbstractThis paper seeks to gain insights on the relationship between growth and unemployment when considering heterogeneous agents in terms of skills. We allow for the possibility of train- ing for unskilled employed workers and for the possibility of human capital depreciation for skilled unemployed workers. These features are introduced in an endogenous job destruction framework Âµa la Mortensen and Pissarides (1998). We show that, when growth accelerates, a larger share of unskilled workers gets trained, increasing the incentives of Â¯rms to update the job-speciÂ¯c technology, rather than destroying it. The positive impact of growth on the employment rate is then magniÂ¯ed and the predicting ability of the model to reproduce the sensibility of employment with respect to growth too. When calibrated, the model manages to reproduce the aggregate capitalization eÂ®ect estimated on the basis of OECD data. Fur- thermore, whereas for skilled and unskilled workers getting trained growth yields a reduction in the unemployment rates, for unskilled workers not getting trained growth fosters a rise in the unemployment rates.
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Bibliographic InfoPaper provided by TEPP in its series TEPP Working Paper with number 2010-15.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Moreno-Galbis, Eva, 2010. "On the impact of the TFP growth on the employment rate: does training on-the-job matter?," CEPREMAP Working Papers (Docweb) 1022, CEPREMAP.
- Eva Moreno-Galbis, 2010. "On the impact of the TFP growth on the employment rate: does training on-the-job matter?," Working Papers halshs-00812061, HAL.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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