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Why employment matters: Reviving growth and reducing inequality

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  • Deepak NAYYAR

Abstract

The global economic crisis has led to a sharp slowdown in growth and an even greater slowdown in employment creation. The resulting deterioration in the quality of employment has exacerbated the longer-term trend of rising inequality. Jobless growth has dampened output growth through a worsening income distribution. Wages are costs on the supply side but are also incomes on the demand side, so that profit-led growth and wage-led growth are complements, not substitutes. Thus, growth can create jobs, while added jobs can drive growth. More employment and better jobs can also mitigate rising inequality. If macroeconomic policies focus on fostering employment creation and supporting economic growth, rather than on price stability and balanced budgets, employment would revive growth and reduce inequality.

Suggested Citation

  • Deepak NAYYAR, 2014. "Why employment matters: Reviving growth and reducing inequality," International Labour Review, International Labour Organization, vol. 153(3), pages 351-364, September.
    • Handle: RePEc:bla:intlab:v:153:y:2014:i:3:p:351-364
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    File URL: http://hdl.handle.net/10.1111/j.1564-913X.2014.00208.x
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    References listed on IDEAS

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    1. Deepak Nayyar, 2012. "Macroeconomics and Human Development," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(1), pages 7-30, February.
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    9. Palma, J.G., 2011. "Homogeneous middles vs. heterogeneous tails, and the end of the ‘Inverted-U’: the share of the rich is what it's all about," Cambridge Working Papers in Economics 1111, Faculty of Economics, University of Cambridge.
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    Cited by:

    1. Nur FERIYANTO & Jaka SRIYANA, 2016. "Labor Absorption Under Minimum Wage Policy In Indonesia," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 11-21, June.
    2. Deepak Nayyar, 2016. "Structural transformation in the world economy: On the significance of developing countries," WIDER Working Paper Series 102, World Institute for Development Economic Research (UNU-WIDER).
    3. Monia Ghazali and Rim Mouelhi, 2018. "The Employment Intensity of Growth: Evidence from Tunisia," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(3), pages 85-118, September.
    4. Deepak Nayyar, 2016. "Structural transformation in the world economy: On the significance of developing countries," WIDER Working Paper Series wp-2016-102, World Institute for Development Economic Research (UNU-WIDER).
    5. K. J. Joseph & Liyan Zhang & Kiran Kumar Kakarlapudi, 2018. "The Dragon Turns around and the Elephant Moves Forward: Inequality in China and India under Globalization," Millennial Asia, , vol. 9(3), pages 235-261, December.
    6. Zhengyang Li & Daisy Ju Huang, 2022. "Analysis of clans and employment in China from the aspect of gender," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1567-1591, December.

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