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The Employment Distribution and the Creation of Financial Dependence

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  • Jackson, William A.

Abstract

A fall in national income has varied consequences for the working population: some carry on working as normal, others become unemployed. Those excluded from work lose their main income source and must usually rely on public welfare, entering a financial dependence created endogenously as the economy adjusts. The current paper examines this induced financial dependence and its implications within a Post Keynesian model. A skewed employment distribution forces higher transfer payments than would occur if employment was distributed more evenly. The additional expenditures help to sustain profitability, so it is in the collective interest of employers and profit recipients to concentrate unemployment in a subset of the working population.

Suggested Citation

  • Jackson, William A., 1991. "The Employment Distribution and the Creation of Financial Dependence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(2), pages 267-280.
    • Handle: RePEc:zbw:espost:324861
    DOI: 10.1080/01603477.1991.11489897
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    Keywords

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    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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