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The Dynamics of Technological Unemployment

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  • Fabien Postel-Vinay

    (INRA-LEA, France, and University of British Columbia, Canada)

Abstract

This article compares the short- and long-run effects of technological progress on employment. It presents a simple model of frictional unemployment capturing the negative creative destruction effects of technological change on employment. In the long run, faster technological change accelerates job obsolescence, which reduces the equilibrium level of employment. But it is also shown to have short-run positive and potentially important effects on employment. This tends to partially reconcile the "Schumpeterian" view of the effects of technological change on labor markets with facts such as the response of most OECD unemployment rates to the 1970s productivity slowdown. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

Suggested Citation

  • Fabien Postel-Vinay, 2002. "The Dynamics of Technological Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 737-760, August.
  • Handle: RePEc:ier:iecrev:v:43:y:2002:i:3:p:737-760
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    Citations

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    Cited by:

    1. Fabio Canova & David Lopez-Salido & Claudio Michelacci, 2006. "Schumpeterian technology shocks," Economics Working Papers 1012, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2007.
    2. Sergio Destefanis & Giuseppe Mastromatteo, 2016. "The Beveridge Curve in the OECD. Before and after the great recession," Working Papers 5, Department of the Treasury, Ministry of the Economy and of Finance.
    3. Sergio Destefanis & Giuseppe Mastromatteo, 2015. "The Beveridge Curve in the OECD Before and After the Crisis," Discussion Papers 4_2015, CRISEI, University of Naples "Parthenope", Italy.
    4. del Rio, Fernando, 2010. "Investment-specific technical progress, capital obsolescence and job creation," Labour Economics, Elsevier, vol. 17(1), pages 248-257, January.
    5. MG. Ladu, 2005. "Growth and Employment: A survey on the Demand Side of the Labour Market," Working Paper CRENoS 200507, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    6. 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.
    7. Mauro Boianovsky & Hans-Michael Trautwein, 2010. "Schumpeter on unemployment," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 233-263, April.
    8. Miyamoto, Hiroaki & Takahashi, Yuya, 2011. "Productivity growth, on-the-job search, and unemployment," Journal of Monetary Economics, Elsevier, vol. 58(6), pages 666-680.
    9. Moreno-Galbis, E., 2006. "Unemployment and endogenous growth with new technologies-skill complementarity," Economic Modelling, Elsevier, vol. 23(2), pages 364-386, March.
    10. Miyamoto, Hiroaki, 2010. "R&D, unemployment, and labor market policies," Japan and the World Economy, Elsevier, vol. 22(3), pages 198-205, August.
    11. Sergio Destefanis & Giuseppe Mastromatteo, 2015. "The OECD Beveridge Curve: technological progress, globalisation and institutional factors," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 151-172, June.
    12. Sennewald, Ken, 2005. "Controlled Stochastic Differential Equations under Poisson Uncertainty and with Unbounded Utility," Dresden Discussion Paper Series in Economics 03/05, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    13. Chu, Angus C. & Cozzi, Guido & Furukawa, Yuichi, 2013. "Inflation, Unemployment and Economic Growth in a Schumpeterian Economy," MPRA Paper 50510, University Library of Munich, Germany.
    14. Miyamoto Hiroaki, 2016. "Growth and non-regular employment," The B.E. Journal of Macroeconomics, De Gruyter, vol. 16(2), pages 523-554, June.
    15. Pissarides, Christopher & Vallanti, Giovanna, 2004. "Productivity growth and employment: theory and panel estimates," LSE Research Online Documents on Economics 2189, London School of Economics and Political Science, LSE Library.
    16. Thomas B. King, 2005. "Labor productivity and job-market flows: trends, cycles, and correlations," Supervisory Policy Analysis Working Papers 2005-04, Federal Reserve Bank of St. Louis.
    17. Christopher A. Pissarides & Giovanna Vallanti, 2007. "The Impact Of Tfp Growth On Steady-State Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 607-640, May.
    18. Hiroaki Miyamoto & Yuya Takahashi, 2009. "Technological Progress, On-the-Job Search, and Unemployment," ISER Discussion Paper 0734, Institute of Social and Economic Research, Osaka University.
    19. Horst Feldmann, 2013. "Technological unemployment in industrial countries," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1099-1126, November.
    20. MG. Ladu, 2005. "Total Factor Productivity Growth and Employment: A Simultaneous Equations Model Estimate," Working Paper CRENoS 200506, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    21. Langot, François & Moreno-Galbis, Eva, 2013. "Does the growth process discriminate against older workers?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 286-306.
    22. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2007. "Technology—Policy Interaction in Frictional Labour-Markets," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1089-1124.
    23. Martine Carre & David Drouot, 2004. "Pace versus Type: The Effect of Economic Growth on Unemployment and Wage Patterns," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 737-757, July.

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