The Dynamics of Technological Unemployment

Fabien Postel-Vinay ()

UBC Departmental Archives from UBC Department of Economics

Abstract: This paper investigates and provides a comparison of the short- and long-run effects of technological process on employment. It presents a simple standard model of matching unemployment that captures the negative creative destruction effects of technological change on employment. In the long-run, faster technological change implies faster job obsolescence, which is detrimental to the equilibrium level of employment. But it is also shown to have short-run positive and potentially important effects on employment. The dynamic behavior of employment is thus 'perverse' in some sense, since its long- and short-run adjustments have opposite signs. This is an important feature of the model, since it tends to partially reconcile the 'Schumpeterian' view of the effects of technological change on labor market variables with the observed facts, and in particular with the response of most OECD unemployment rates to the mid 1970s productivity slowdown.

Keywords: UNEMPLOYMENT; TECHNOLOGICAL CHANGE; PRODUCTIVITY (search for similar items in EconPapers)
JEL-codes: E24 J41 O33 (search for similar items in EconPapers)
Date: Written

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Journal Article: The Dynamics of Technological Unemployment (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:ubc:bricol:98-20

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