Productivity growth and employment: theory and panel estimates

Christopher Pissarides and Giovanna Vallanti

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Theoretical predictions of the effect of TFP growth on employment are ambiguous, and depend on the extent to which new technology is embodied in new jobs. We estimate a model for employment, wages and investment with an annual panel for the United States, Japan and Europe and find that TFP growth increases employment. For the United States TFP growth explains the trend change in unemployment. We evaluate the model and find that creative destruction plays no part in aggregate unemployment dynamics. The model can explain up to half of the estimated impact of growth on unemployment.

Keywords: TFP growth; employment; creative destruction; capitalization effect; unemployment dynamics; embodied technology (search for similar items in EconPapers)
JEL-codes: E24 J64 O51 O52 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2004-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://eprints.lse.ac.uk/2189/ Open access version. (application/pdf)

Related works:
Working Paper: Productivity Growth and Employment: Theory and Panel Estimates (2004)
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:ehl:lserod:2189

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().