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Labor Market Competitiveness and Poverty

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  • Goto, Hideaki
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    Abstract

    How does labor market competitiveness frame the impact of greater labor productivity and lower inequality on poverty? Specifically, does greater competitiveness increase the impact of higher labor productivity and lower inequality on poverty reduction? In a simple model, we show that there is complementarity between competitiveness and productivity – the greater is one, the larger is the impact of the other. This suggests that improving labor market competitiveness is worthwhile not only for its own sake, but because it improves the transmission mechanism from productivity increases to poverty reduction. We also derive precise conditions under which there is a similar complementarity between equality and competitiveness in poverty reduction.

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    File URL: http://purl.umn.edu/51159
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    Bibliographic Info

    Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 51159.

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    Date of creation: 28 Sep 2008
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    Handle: RePEc:ags:cudawp:51159

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    Related research

    Keywords: inequality; labor productivity; market competitiveness; poverty; Food Security and Poverty; International Development; Political Economy; D6; I32; J2; J64;

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    1. Sullivan, Daniel, 1989. "Monopsony Power in the Market for Nurses," Journal of Law and Economics, University of Chicago Press, vol. 32(2), pages S135-78, October.
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    4. Basu, Kaushik, 2005. "Globalization, Poverty and Inequality: What Is the Relationship? What Can Be Done?," Working Papers 05-13, Cornell University, Center for Analytic Economics.
    5. Dollar, David, 2004. "Globalization, poverty, and inequality since 1980," Policy Research Working Paper Series 3333, The World Bank.
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    7. Douglas O. Staiger & Joanne Spetz & Ciaran S. Phibbs, 2010. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 211-236, 04.
    8. Bhaskar, V. & To, Ted, 2003. "Oligopsony and the distribution of wages," European Economic Review, Elsevier, vol. 47(2), pages 371-399, April.
    9. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1.
    10. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
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