Labor Mobility and Productivity Growth
AbstractGrowth models of learning-by-doing assume that knowledge learned in produc- tion gets freely and instantly spread to the whole economy. As a result, the econ- omy exhibits aggregate increasing returns and the total factor productivity (TFP) growth is endogenous. However, the assumption of instant diusion of knowledge seems unrealistic. Diusion of knowledge takes time and requires some channel of transmission. In this paper we assume this transmission channel is learning-by- hiring, since knowledge is embodied in workers. We present a model where the free and instant diusion of knowledge may exist only within sectors, but not across sectors. Diusion of knowledge across sectors can only occur through the mobility of labor and, therefore, the labor market determines both the level and growth of TFP. We investigate how labor mobility costs modify the equilibrium outcome of such an economy considering two scenarios: endogenous and exogenous growth. Moreover, we show that other labor market ine ciencies, such as labor income taxes or labor search costs, may reduce labor mobility and therefore modify TFP.
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Bibliographic InfoPaper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 254.
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Date of creation: 2011
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Find related papers by JEL classification:
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-BEC-2011-06-25 (Business Economics)
- NEP-DGE-2011-06-25 (Dynamic General Equilibrium)
- NEP-LAB-2011-06-25 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Javier Coto-Martínez & Carlos Garriga & Fernando Sánchez-Losada, 2007.
"Optimal Taxation with Imperfect Competition and Aggregate Returns to Specialization,"
Journal of the European Economic Association, MIT Press,
MIT Press, vol. 5(6), pages 1269-1299, December.
- Javier Coto-Martínez & Carlos Garriga & Fernando Sánchez-Losada, 2007. "Optimal taxation with imperfect competition and aggregate returns to specialization," Working Papers, Federal Reserve Bank of St. Louis 2007-036, Federal Reserve Bank of St. Louis.
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