Comment : further sufficient conditions for an inverse relationship between productivity and employment

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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Abstract

Extant empirical studies document that productivity gains due to technological progress often lead to reductions in employment. This paper rationalizes the stated empirical finding within the context of the theory of the competitive firm under price uncertainty. We show that technological progress affects employment adversely if the firm's coefficient of relative risk aversion is no less than unity and its production technology exhibits non-decreasing returns to scale. On the other hand, technological progress unambiguously increases output if the firm's preference has non-increasing absolute risk aversion.
Original languageEnglish
Pages (from-to)565-571
Number of pages7
JournalQuarterly Review of Economics and Finance
Volume39
Issue number4
DOIs
Publication statusPublished - 1 Jan 1999

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Technological progress
Productivity
Returns to scale
Empirical study
Coefficients
Relative risk aversion
Price uncertainty
Production technology
Absolute risk aversion

Cite this

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title = "Comment : further sufficient conditions for an inverse relationship between productivity and employment",
abstract = "Extant empirical studies document that productivity gains due to technological progress often lead to reductions in employment. This paper rationalizes the stated empirical finding within the context of the theory of the competitive firm under price uncertainty. We show that technological progress affects employment adversely if the firm's coefficient of relative risk aversion is no less than unity and its production technology exhibits non-decreasing returns to scale. On the other hand, technological progress unambiguously increases output if the firm's preference has non-increasing absolute risk aversion.",
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Comment : further sufficient conditions for an inverse relationship between productivity and employment. / CHOW, Kong Wing, Clement; WONG, Kit Pong.

In: Quarterly Review of Economics and Finance, Vol. 39, No. 4, 01.01.1999, p. 565-571.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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