Why Does Trend Growth Affect Equilibrium Employment? A New Explanation of an Old Puzzle

• 成果类型: Article
• 署名作者: Elsby, Michael W. L.; Shapiro, Matthew D.
• 署名单位: University of Edinburgh; National Bureau of Economic Research; University of Michigan System; University of Michigan
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.102.4.1378
• 发表日期: 2012
• 页码: 1378-1413
• 关键词: life-cycle; job creation; unemployment; decline; PARTICIPATION; institutions; earnings; progress; HEALTH; wages

摘要

That the employment rate appears to respond to changes in trend growth is an enduring macroeconomic puzzle. This paper shows that, in the presence of a return to experience, a slowdown in productivity growth raises reservation wages, thereby lowering aggregate employment. The paper develops new evidence that shows this mechanism is important for explaining the growth-employment puzzle. The combined effects of changes in aggregate wage growth and returns to experience account for all the increase from 1968 to 2006 in nonemployment among low-skilled men and for approximately half the increase in nonemployment among all men. (JEL E24, J24, J31)