Unemployment invariance

Arbeitspapier

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 equilibrium 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 476

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: Public Policy ; Wages, Compensation, and Labor Costs: General ; Labor Demand ; Labor Force and Employment, Size, and Structure ; Mobility, Unemployment, and Vacancies: Public Policy ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: Unemployment ; employment ; wage determination ; labor supply ; capital accumulation ; productivity ; technological change ; economic growth ; Natürliche Arbeitslosigkeit ; Arbeitsmarkttheorie ; Investition ; Technischer Fortschritt ; Wachstumstheorie ; Neue Wachstumstheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Karanassou, Marika ; Snower, Dennis J.
• Event: Veröffentlichung
• (who): Queen Mary University of London, Department of Economics
• (where): London
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/3111
• Last update: 10.03.2025, 11:41 AM CET