Productivity growth and employment: theory and panel estimates

Pissarides, Christopher ORCID: 0000-0002-0695-058X and Vallanti, Giovanna (2004) Productivity growth and employment: theory and panel estimates. CEP discussion paper; CEPDP0663 (0663). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Theoretical predictions of the effect of TFP growth on employment are ambiguous, and depend on the extent to which new technology is embodied in new jobs. We estimate a model for employment, wages and investment with an annual panel for the United States, Japan and Europe and find that TFP growth increases employment. For the United States TFP growth explains the trend change in unemployment. We evaluate the model and find that creative destruction plays no part in aggregate unemployment dynamics. The model can explain up to half of the estimated impact of growth on unemployment.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2004 C. A. Pissarides and G. Vallanti
Divisions:	Centre for Economic Performance Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation) O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S.; Canada O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O52 - Europe
Date Deposited:	27 Apr 2007
Last Modified:	11 Dec 2024 18:37
URI:	http://eprints.lse.ac.uk/id/eprint/2189

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