Creative Destruction with On-the-Job Search

Jean-Baptiste Michau

Review of Economic Dynamics, 2013, vol. 16, issue 4, 691-707

Abstract: This paper studies the consequences of creative destruction on unemployment in a frictional labor market with on-the-job search. For a benchmark calibration, a 1% increase in growth raises the unemployment rate by 1.72 percentage points in the economy without on-the-job search and by only 0.07 percentage points with on-the-job search. Rather than contributing to unemployment through more frequent job separations, in the presence of on-the-job search, creative destruction induces a direct reallocation of workers from low to high productivity jobs. (Copyright: Elsevier)

Keywords: Creative destruction; Obsolescence; On-the-job search; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 J23 J63 J64 O39 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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DOI: 10.1016/j.red.2012.10.011

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