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Unemployment, Growth and the Organisation of Work

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Author Info
Henri L.F. de Groot () (Dept. of Spational Economic, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)
Anton B.T.M. van Schaik (Department of Economics, Tilburg University)

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Abstract

We develop a two-sector endogenous growth model with a dual labour market resulting from the presence of an effort extraction function in one sector. Effort of workers can be influenced by pay and monitoring. This results in an endogenous non-competitive wage differential between sectors and a monitoring intensity that is a source of fixed costs for the firm. Growth is driven by investments in R&D performed in the high-wage sector. Unemployment is determined by the costs and benefits of waiting for a high-paid job. The wage structure, growth, and unemployment are shown to depend on the way effort is extracted.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-017/3.

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Date of creation: 15 Feb 2002
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Handle: RePEc:dgr:uvatin:20020017

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Related research
Keywords: endogenous growth; unemployment; effort extraction; dual labour market;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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    Other versions:
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    Other versions:
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