The Struggle for Rents in a Schumpterian Economy

H.L.F. de Groot

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This paper develops a two-sector endogenous growth model with a dual labour market. Trade unions strive for the extraction of as high a rent as possible from the growth generating imperfectly competitive primary sector. This union behaviour results in a non-competitive wage differential between the primary and secondary (perfectly competitive) sector. The consequence of this distortion is the coming about of wait unemployment, i.e., unemployed queuing for high-paid jobs. Employment and growth are negatively dependent on the relative strength of the union. An increase in concentration in the high-tech sector is good for growth and employment.
Original languageEnglish
Place of PublicationTilburg
Number of pages30
Publication statusPublished - 1996

Publication series

NameCentER Discussion Paper


  • endogenous growth
  • trade unions
  • unemployment
  • dual labour markets
  • non-competitive wage differentials


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