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Long-Run Economic Performance and the Labor Market

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Author Info

  • Alberto Alonso

    ()
    (Universidad Complutense)

  • Cristina Echevarria

    ()
    (University of Saskatchewan, Department of Economics)

  • Kien C. Tran

    ()
    (University of Saskatchewan, Department of Economics)

Abstract

This article uses a simple variation of the Solow model to study the interrelations between economic growth and the labor market. We show, both analytically and empirically, that income and capital per worker in the steady state depend positively on flexibility of the labor market; that the steady-state unemployment rate depends positively on the rate of population growth and the productivity growth rate and negatively on the savings rate and flexibility of the labor market; and, finally, that labor market flexibility affects convergence toward steady state.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 70 (2004)
Issue (Month): 4 (April)
Pages: 905-919

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Handle: RePEc:sej:ancoec:v:70:4:y:2004:p:905-919

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Web page: http://www.southerneconomic.org/
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Cited by:
  1. Quintero-Rojas, Coralia & Adjemian, Stéphane & Langot, François, 2008. "Growth, Unemployment and Tax/Benefit system in European Countries," MPRA Paper 7909, University Library of Munich, Germany.

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