Title
Comment : further sufficient conditions for an inverse relationship between productivity and employment
Document Type
Journal article
Source Publication
Quarterly Review of Economics and Finance
Publication Date
Winter 1-1-1999
Volume
39
Issue
4
First Page
565
Last Page
571
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.
DOI
10.1016/S1062-9769(99)00040-X
Print ISSN
10629769
E-ISSN
18784259
Publisher Statement
Copyright © 1999 Board of Trustees of the University of Illinois
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Chow, K. W., & Wong, K. P. (1999). Comment: Further sufficient conditions for an inverse relationship between productivity and employment. Quarterly Review of Economics and Finance, 39(4), 565-571. doi: 10.1016/S1062-9769(99)00040-X
