Job Creation and Destruction?

Martin Zagler

Chapter 7 in Growth and Employment in Europe, 2004, pp 115-135 from Palgrave Macmillan

Abstract: Abstract The endogenous growth literature claims that economic growth is driven by structural change. The cost associated with economic growth is structural unemployment, since structural change destroys jobs in one firm and creates jobs in another. This body of theory makes the strong prediction that the number of jobs created equals the number of jobs destroyed for any rate of economic growth, thus resulting in a constant rate of unemployment. By contrast, neoclassical growth theory suggests that exogenous productivity gains are incorporated in the factor labor, hence changes in economic growth should have no impact on the level of unemployment. This chapter presents a simple theoretical framework of intersectoral and intrasectoral change.

Keywords: Endogenous Growth Model; Traditional Sector; Innovation Sector; Neoclassical Growth Model; Structural Unemployment (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50632-9_7

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DOI: 10.1057/9780230506329_7

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