Technological Progress, Job Creation and Job Destruction
New technology embodied in capital equipment can be adopted either through destruction of existing jobs and the creation of new ones or by renovation, updating the job's equipment. Under the assumption that the destruction of jobs generates worker layoffs, we show that higher productivity growth induces lower unemployment when renovation costs are low but that the response of employment to growth switches from positive to negative as the cost of updating existing technology rises above a unique critical level. The effects of idiosyncratic productivity differences and cross sector mobility on the aggregate relationship between growth and unemployment are also studied. (Copyright: Elsevier)
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Volume (Year): 1 (1998)
Issue (Month): 4 (October)
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- Dale T. Mortensen & Christopher A. Pissarides, 1993.
"Job Creation and Job Destruction in the Theory of Unemployment,"
CEP Discussion Papers
dp0110, Centre for Economic Performance, LSE.
- Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
- Ricardo J. Caballero & Mohamad L. Hammour, 1991.
"The Cleansing Effect of Recessions,"
NBER Working Papers
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NBER Working Papers
4472, National Bureau of Economic Research, Inc.
- Bertola, Giuseppe & Caballero, Ricardo J, 1994. "Cross-Sectional Efficiency and Labour Hoarding in a Matching Model of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 435-56, July.
- Aghion, Philippe & Howitt, Peter, 1991.
"Growth and Unemployment,"
CEPR Discussion Papers
577, C.E.P.R. Discussion Papers.
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