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Uneven Technical Progress and Unemployment

Author

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  • Gersbach, Hans

    (ETH Zurich)

  • Schniewind, Achim

    (Heidelberg University)

Abstract

In a two-sector model with real wage rigidity, we examine how technical progress in one sector affects unemployment in the whole economy. We show that aggregate unemployment decreases for uneven technical change in the case of Cobb-Douglas production functions. For every type of technical progress, however, there are also elasticities of substitution in production and utility functions leading to a rise in unemployment. Moreover, we identify polar cases when unemployment strongly decreases.

Suggested Citation

  • Gersbach, Hans & Schniewind, Achim, 2002. "Uneven Technical Progress and Unemployment," IZA Discussion Papers 478, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp478
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    References listed on IDEAS

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    More about this item

    Keywords

    elasticities of substitution; uneven technical progress; unemployment;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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