Skill shortages, labor reallocation, and growth

Arbeitspapier

This paper explores the relationship between growth and unemployment. Knowledge formation is the source of growth, which includes the two dimensions technologies and skills. Both are connected through a technology-skill complementarity which may have limiting effects on the reallocation of labor and technology implementation in manufacturing. The reallocation of labor becomes necessary as growth leads to continuous job creation and job destruction. The ratio of job destruction to job creation identifies three regimes, two of which are associated with unemployment either due to restricted labor demand or due to skill shortages. While in the regime with full employment the model confirms the standard result that knowledge formation has positive effects on growth, the outcome is much more ambiguous if we consider a possible technology-skill mismatch and unemployment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Thünen-Series of Applied Economic Theory - Working Paper ; No. 59

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Labor Turnover; Vacancies; Layoffs ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: endogenous growth ; knowledge formation ; unemployment ; skill mismatch

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hetze, Pascal
• Event: Veröffentlichung
• (who): Universität Rostock, Institut für Volkswirtschaftslehre
• (where): Rostock
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/39725
• Last update: 10.03.2025, 11:42 AM CET