IDEAS home Printed from https://ideas.repec.org/a/adr/anecst/y2018i129p85-102.html
   My bibliography  Save this article

Legal Wage Constraints and Capital Accumulation

Author

Listed:
  • Damien Gaumont
  • Daniel Leonard

Abstract

This paper studies the ability of a fully competitive economy to recover from shocks in the long run in the presence of constraints involved by anti-discrimination rules by age, such as the requirement of ?equal pay for equal work? and the restriction against decreasing salaries as workers age. After an external shock in the presence of the second type of constraint, the economy recovers in the long run, while in the presence of the first type of constraint the economy never recovers. Unfortunately when both constraints are enforced the economy is totally unable to recover from an external shock. It stagnates. Therefore the convergence of the economy to a first-best steady state, irrespective of initial conditions or shocks, is compromised.

Suggested Citation

  • Damien Gaumont & Daniel Leonard, 2018. "Legal Wage Constraints and Capital Accumulation," Annals of Economics and Statistics, GENES, issue 129, pages 85-102.
  • Handle: RePEc:adr:anecst:y:2018:i:129:p:85-102
    DOI: 10.15609/annaeconstat2009.129.0085
    as

    Download full text from publisher

    File URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.129.0085
    Download Restriction: no

    More about this item

    Keywords

    Macrodynamics; Labor Economics; Labor Policy; Wages; Growth;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:2018:i:129:p:85-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurent Linnemer). General contact details of provider: http://edirc.repec.org/data/ensaefr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.