Unemployment and endogenous growth

A.B.T.M. van Schaik, H.L.F. de Groot

Research output: Working paperDiscussion paperOther research output

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Abstract

In this paper we develop a two-sector endogenous growth model with a dual labour market, based on efficiency wages. Growth is driven by intentional R&D performed in the high-tech and high-wage sector. It is examined how a change in rivalry among firms affects simultaneously growth and unemployment. On the one hand, an increase of the elasticity of substitution between the product varieties of different high-tech firms reduces market power and leads to higher growth but reduces job prospects. On the other hand, if barriers to entry exist, an increase of the number of rivals in the market (due to removal of entry barriers) leads to lower growth, whereas the effect on aggregate employment is ambiguous.
Original languageEnglish
PublisherUnknown Publisher
Number of pages30
Volume1995-75
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-75

Fingerprint

Unemployment
Endogenous growth
Market power
Elasticity of substitution
Rivalry
Wages
Efficiency wages
Endogenous growth model
High-tech
Barriers to entry
High-tech firms
Dual labor market
Entry barriers
Product variety

Keywords

  • Economic Growth
  • Wages
  • Unemployment
  • Labour Market
  • Growth Models
  • labour economics

Cite this

van Schaik, A. B. T. M., & de Groot, H. L. F. (1995). Unemployment and endogenous growth. (CentER Discussion Paper; Vol. 1995-75). Unknown Publisher.
van Schaik, A.B.T.M. ; de Groot, H.L.F. / Unemployment and endogenous growth. Unknown Publisher, 1995. (CentER Discussion Paper).
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van Schaik, ABTM & de Groot, HLF 1995 'Unemployment and endogenous growth' CentER Discussion Paper, vol. 1995-75, Unknown Publisher.

Unemployment and endogenous growth. / van Schaik, A.B.T.M.; de Groot, H.L.F.

Unknown Publisher, 1995. (CentER Discussion Paper; Vol. 1995-75).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Unemployment and endogenous growth

AU - van Schaik, A.B.T.M.

AU - de Groot, H.L.F.

N1 - Pagination: 30

PY - 1995

Y1 - 1995

N2 - In this paper we develop a two-sector endogenous growth model with a dual labour market, based on efficiency wages. Growth is driven by intentional R&D performed in the high-tech and high-wage sector. It is examined how a change in rivalry among firms affects simultaneously growth and unemployment. On the one hand, an increase of the elasticity of substitution between the product varieties of different high-tech firms reduces market power and leads to higher growth but reduces job prospects. On the other hand, if barriers to entry exist, an increase of the number of rivals in the market (due to removal of entry barriers) leads to lower growth, whereas the effect on aggregate employment is ambiguous.

AB - In this paper we develop a two-sector endogenous growth model with a dual labour market, based on efficiency wages. Growth is driven by intentional R&D performed in the high-tech and high-wage sector. It is examined how a change in rivalry among firms affects simultaneously growth and unemployment. On the one hand, an increase of the elasticity of substitution between the product varieties of different high-tech firms reduces market power and leads to higher growth but reduces job prospects. On the other hand, if barriers to entry exist, an increase of the number of rivals in the market (due to removal of entry barriers) leads to lower growth, whereas the effect on aggregate employment is ambiguous.

KW - Economic Growth

KW - Wages

KW - Unemployment

KW - Labour Market

KW - Growth Models

KW - labour economics

M3 - Discussion paper

VL - 1995-75

T3 - CentER Discussion Paper

BT - Unemployment and endogenous growth

PB - Unknown Publisher

ER -

van Schaik ABTM, de Groot HLF. Unemployment and endogenous growth. Unknown Publisher. 1995. (CentER Discussion Paper).