Pace versus Type: The Effect of Economic Growth on Unemployment and Wage Patterns

Martine Carré and David Drouot
Additional contact information
David Drouot: Universite d'Evry Val d'Essonne

Review of Economic Dynamics, 2004, vol. 7, issue 3, 737-757

Abstract: Much of the literature on growth and unemployment has emphasized the effect of the increasing pace of technological progress on job instability and wage inequality. But less attention has been placed on how the changes in the very nature of work, due to technical change, affects the rate of job destruction, and hence the level of unemployment. We argue that technological progress modifies on-the-job learning and, through general equilibrium effects, unemployment and wage dispersion. In the context of the canonical Mortensen and Pissarides [1998] model, we show that, in a routine world, this 'on-the-job learning effect' can offset the creative destruction effect induced by an increase in the pace of technological change on unemployment, whereas it can amplify it as jobs become less routine. Moreover, the relationship between wage dispersion and growth can be non monotone. This finding helps explain the wage compression/expansion observed in time series data. (Copyright: Elsevier)

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://dx.doi.org/10.1016/j.red.2003.12.002 Full text (application/pdf)
Access to full texts is restricted to ScienceDirect subscribers and ScienceDirect institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Working Paper: Pace versus type: the effect of economic growth on unemployment and wage patterns (2004)
Working Paper: Pace versus Type: The Effect of Economic Growth on Unemployment and Wage Patterns? (2003)
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:red:issued:v:7:y:2004:i:3:p:737-757

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/j.red.2003.12.002

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().