A Schumpeterian model of equilibrium unemployment and labor turnover

M. Fuat Sener ()
Additional contact information
M. Fuat Sener: Department of Economics, Social Sciences Building, Union College, Schenectady, NY 12308, USA

Journal of Evolutionary Economics, 2000, vol. 10, issue 5, 557-583

Abstract: This paper constructs a general equilibrium model of equilibrium unemployment by combining an endogenous growth model with a variant of equilibrium search theory. The analysis offers two explanations for the causes of widening wage gap between skilled and less-skilled labor, and rising unemployment rate among the less skilled: technological change in the form of an increase in the size of innovations or skilled labor saving technological change in R&D activity. In addition, the model identifies two distinct effects of faster technological progress on the aggregate unemployment rate. First, it increases the rate of labor turnover and therefore increases the aggregate unemployment rate - the creative destruction effect. Second, it creates R&D jobs, which offer workers complete job security, and consequently reduces the aggregate unemployment rate - the resource reallocation effect.

Keywords: Frictional; unemployment; -; Wage; inequality; -; Endogenous; growth; -; Job-matching (search for similar items in EconPapers)
JEL-codes: J31 J63 O30 (search for similar items in EconPapers)
Date: 2000-10-23
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.de/link/service/journals/00191/papers/0010005/00100557.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joevec:v:10:y:2000:i:5:p:557-583

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/191/PS2

Access Statistics for this article

Journal of Evolutionary Economics is currently edited by Uwe Cantner, Elias Dinopoulos, Horst Hanusch and Luigi Orsenigo

More articles in Journal of Evolutionary Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().