The authors examine economic expansion within a Heckscher-Ohlin model with two factors and two goods under equilibrium unemployment. The labor supply function is obtained from an optimization process wherein consumers choose between real income and leisure. Technological change is exogenous, but can be influenced by government tax incentives. Within this model, programs that stimulate technological change in capital intensive industries may reduce employment. Alternatively, technological change in labor intensive industries may increase labor force participation through reducing equilibrium unemployment.