Endogenous Growth and the Labor Market

  • Frédérique Cerisier
  • Fabien Postel-Vinay


We present a multisectoral model of qualitative endogenous growth with imperfect matching on the labor market. Under these conditions, growth induces unemployment through the Schumpeterian process of creative destruction. We study the long-run link between growth and unemployment. We show that this link structurally depends on the relative importance of the degree of competition in the economy, and that of intertemporal substitutability. Moreover, although the relationship between growth and labor market variables is generally ambiguous, we show that the creative destruction effects are very likely to dominate in this kind of models, thus suggesting that a increase in the growth rate should be accompanied by a rise in long-term unemployment.


Labor Market Endogenous Growth Entry Cost Creative Destruction Hiring Process 
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Copyright information

© Springer Science+Business Media Dordrecht 2000

Authors and Affiliations

  • Frédérique Cerisier
    • 1
  • Fabien Postel-Vinay
    • 1
  1. 1.MAD, Université de Paris 1France

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