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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."

Suggested Citation

  • Martin Gervais & Nir Jaimovich & Henry E. Siu & Yaniv Yedid-Levi, 2013. "Technological Learning and Labor Market Dynamics," NBER Working Papers 19767, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19767
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    References listed on IDEAS

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    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 2014-01-13 02:40:50

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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 277, Central Bank of Brazil, Research Department.
    3. Gervais, Martin & Jaimovich, Nir & Siu, Henry E. & Yedid-Levi, Yaniv, 2016. "What should I be when I grow up? Occupations and unemployment over the life cycle," Journal of Monetary Economics, Elsevier, vol. 83(C), pages 54-70.
    4. Andrea Waddle, 2017. "Trade, Technological Change, and Wage Inequality:The Case of Mexico," 2017 Meeting Papers 1185, Society for Economic Dynamics.
    5. Sergio A. Lago Alves, 2016. "Monetary Policy, Trend Inflation and Unemployment Volatility," Working Papers Series 450, Central Bank of Brazil, Research Department.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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