Bridging the Technology-Gap in Economic Transition, the J-curve of Growth and Unemployment

The macroeconomic experience has been somewhat ambiguous during the historic experiment of economic transition in the former centrally-planed countries in Central and East Europe (CEE). The economic restructuring produced a notable catching-up in terms of productivity but also a J-curve shape of output growth accompanied by an increase in unemployment on a large scale. This paper models the transformation progress which leads to these contradictory outcomes. Before transition initiated catching-up, the economies suffered from two limits to growth: a gap of usable capital and a gap of technologies. Accordingly, a rapid technology transfer from the advanced Western economies led to a significant technological and structural change combined with high rates of labor reallocation. If we include frictions in the consequent matching between job seekers and jobs, the model reproduces the pattern of productivity, growth and unemployment that we find in the CEE countries.catching-up, growth, unemployment, technological change, transition economies

Unemployment, Growth, and Complementarities between Innovation and Knowledge Diffusion

This paper analyzes the relationship between endogenous growth and unemployment. It provides knowledge diffusion as the link between innovation-based growth through creative destruction and the labor market outcome. Three dimensions of knowledge are considered: human capital (general skills), know-how gained through learning-byusing, and codified knowledge accumulated by research activities. Output growth is driven by innovations. However, the implementation of technological progress into a vintage-type production process requires the know-how that is only acquirable by the diffusion of knowledge through learning-by-using. A mutual feedback between research and the employment level thus arises, based on the complementary relationship between the input of labor in R&D and manufacturing. Inadequate knowledge diffusion causes limited growth and mismatch unemployment.mismatch unemployment, innovation-based growth, knowledge diffusion

Skill Shortages, Labor Reallocation, and Growth

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.endogenous growth, knowledge formation, unemployment, skill mismatch

Economic Integration, Labor Reallocation, and Growth

This paper develops an endogenous growth model with continuous labor reallocation. Economic integration increases the home availability of technologies globally developed. The wider technology pool has implications for the vintage structure of the manufacturing sector and affects the revenues earned in the two sectors R&D and manufacturing. The free exchange of technologies across the borders leads to structural change and labor reallocation within manufacturing and between the sectors. If there arises too much job destruction caused by economic integration, unemployment may be a consequence of more openness to technologies developed abroad.economic integration, job destruction, job creation, endogenous growth

Aging in German Industries and Selected Professions (Alterung der Erwerbspersonen in Deutschland)

Population aging translates into aging of the labor force. However, the impact of the former on the latter is neither straightforward nor uniform over specific groups. The reason is that economic decisions concerning, for example, duration of schooling or labor-market participation of women and those aged 60+ as well as industry-specific requirements on the demand side affect age-specific employment rates and thus the age structure of labor. In this paper we describe and use different measures of aging to obtain a picture of the aging process in selected German industries and professions between 1980 and 2000. Our results reveal pronounced differences in the age structure, timing and dynamics of aging. However, we find that aging is, in general, subject to convergence towards a homogenous age composition: Subgroups that were relatively young in 1980 aged faster, and vice versa.

Preface to the Rostock Debate on Demographic Change

The first Rostock Debate on Demographic Change, which took place on February 21, 2006, centered on the following question: Should governments in Europe push much more aggressively for gender equality to raise fertility? The four debaters were Laurent Toulemon from the Institut National d’Etudes Demograhiques (France), Dimiter Philipov from the Vienna Institute of Demography (Austria), Livia Oláh from Stockholm University (Sweden), and Gerda Neyer from the Max Planck Institute (Germany)demographic change, Europe, family policy, fertility, gender, welfare state