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The Struggle for Rents in a Schumpterian Economy

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Author Info

  • Groot, H.L.F. de

    (Tilburg University, Center for Economic Research)

Abstract

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.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1996-51.

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Date of creation: 1996
Date of revision:
Handle: RePEc:dgr:kubcen:199651

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Web page: http://center.uvt.nl

Related research

Keywords: endogenous growth; trade unions; unemployment; dual labour markets; non-competitive wage differentials;

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Cited by:
  1. Schaik, A.B.T.M. van & Groot, H.L.F. de, 1997. "Productivity and Unemployment in a Two-country Model with Endogenous Growth," Discussion Paper 1997-53, Tilburg University, Center for Economic Research.

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