Uneven Technical Progress and Unemployment

23 Pages Posted: 27 May 2002

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Achim Schniewind

University of Heidelberg - Alfred Weber Institute for Economics

Date Written: September 2003

Abstract

In a two-sector-economy with real wage rigidity, we examine how technical progress in one sector affects aggregate unemployment. We show that aggregate unemployment decreases for uneven technical change in the case of Cobb-Douglas production functions. For every type of technical progress there are also elasticities of substitution in production and utility functions leading to a rise in unemployment. Moreover, we identify polar cases when unemployment strongly decreases.

Keywords: Uneven Technical Progress, Elasticities of Substitution, Unemployment

JEL Classification: D58, E24, J60, L13

Suggested Citation

Gersbach, Hans and Schniewind, Achim, Uneven Technical Progress and Unemployment (September 2003). IZA Discussion Paper No. 478. Available at SSRN: https://ssrn.com/abstract=310360

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Achim Schniewind

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

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