Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/92579 
Year of Publication: 
2009
Series/Report no.: 
ISER Discussion Paper No. 734
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This paper studies the impact of long-run productivity growth on job finding and separation rates, and thus the unemployment rate, using a search and matching model. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and Pissarides (1994). The incorporation of on-the-job search allows faster growth to reduce unemployment by decreasing the separation rate and inducing job creation. We demonstrate that introducing on-the-job search substantially improves the ability of the Mortensen and Pissarides model to explain the impact of growth on unemployment. Our quantitative analysis shows that our model increases the magnitude of the negative impact of growth on unemployment compared to the standard matching model with disembodied technological progress.
Subjects: 
Growth
Unemployment
Search-matching model
On-the-job search
JEL: 
E24
J64
O40
Additional Information: 
The 11th ISER-Moriguchi Prize (2009) Awarded Paper.
Document Type: 
Working Paper

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