EconPapers    
Economics at your fingertips  
 

Unemployment Invariance

Marika Karanassou and Dennis J. Snower
Additional contact information
Marika Karanassou: Queen Mary, University of London
Dennis J. Snower: Birkbeck, University of London

No 476, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: This paper provides a critique of the "unemployment invariance hypothesis", according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity, and the labor force. Using Solow growth and endogenous growth models, we show that the labor market alone need not contain all the equilibrating mechanisms to ensure unemployment invariance; in particular, other markets may perform part of the equilibrating process as well. By implication, policies that raise the growth path of capital or increase the effective working-age population may influence the long-run unemployment rate.

Keywords: Unemployment; Employment; Wage determination; Labor supply; Capital accumulation; Productivity; Technological change; Economic growth (search for similar items in EconPapers)
JEL-codes: J21 J23 J30 J38 J64 J68 (search for similar items in EconPapers)
Date: 2002-12-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.qmul.ac.uk/sef/media/econ/research/wor ... 2002/items/wp476.pdf (application/pdf)

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:qmw:qmwecw:476

Access Statistics for this paper

More papers in Working Papers from Queen Mary University of London, School of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by Nicholas Owen ( this e-mail address is bad, please contact ).

 
Page updated 2025-07-26
Handle: RePEc:qmw:qmwecw:476