TECHNOLOGY, UNEMPLOYMENT AND EFFICIENCY

This paper analyzes technology choices and unemployment in search equi librium. In contrast to standard search models, the presence of techno logy choices makes the decentralized equilibrium inefficient; there is too little investment in skills, too little job creation and there ca n be multiple equilibria. The paper also shows that technological prog ress is likely to be slower in labor markets where job tenure is low. (C) 1997 Elsevier Science B.V.