Unemployment, Okun's law, degrowth, steady-state economy, labour productivity

Abstract: One of the biggest fears that most people have when they hear "no growth" is "no jobs". This abstract describes the results of a detailed theoretical and empirical analysis into the relationship between degrowth and unemployment. The theoretical analysis suggests that a stabilisation or reduction of economic output could lead to rising unemployment, in part due to the role of technological progress in increasing labour productivity. The analysis also suggests, however, that unemployment may be combated by reducing working hours, increasing resource efficiency, and by an ageing population. The empirical analysis, which includes an economic and biophysical assessment of Okun's law for OECD countries, suggests that there is a relationship between growth and job creation, but that this relationship varies remarkably between countries. All in all, these results suggest that it may be possible for countries to decouple the goal of stable employment from the rate of economic growth.
Keywords: Unemployment, Okun's law, degrowth, steady-state economy, labour productivity.