Does Economic Growth Exhibit a Different Impact on Job Creation and Job Destruction?

Martin Zagler ()

No 2000-40, ISER working papers from Institute for Social and Economic Research

Abstract: The two main implications of the literature on endogenous growth are a unique equilibrium rate of unemployment for a given rate of economic growth, and an identical number of exits and entries from unemploymennt. This paper tests these two hypotheses against a neoclassical theory of growth and unemployment on the one hand and a theory of endogenous growth and unemployment augmented with inersectoral shifts on the other hand, using microeconomic panel data for the United Kingdom. We find a significant and negative relation between unemployment and economic growth, using fixed effects panel regression methods. Moreover, chi-square-tests on parameter equality in logistic panel regressions for both job creation and destruction reveal that the impact of economic growth differs between exits and entries, hence confirming the sectoral shifts model.

Date: 2001-01-19
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Related works:
Journal Article: DOES ECONOMIC GROWTH EXHIBIT A DIFFERENT IMPACT ON JOB CREATION AND JOB DESTRUCTION? (2006)
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