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Labor Market Competitiveness and Poverty

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  • Goto, Hideaki

Abstract

How does labor market competitiveness frame the impact of greater labor productivity and lower inequality on poverty? Specifically, does greater competitiveness increase the impact of higher labor productivity and lower inequality on poverty reduction? In a simple model, we show that there is complementarity between competitiveness and productivity – the greater is one, the larger is the impact of the other. This suggests that improving labor market competitiveness is worthwhile not only for its own sake, but because it improves the transmission mechanism from productivity increases to poverty reduction. We also derive precise conditions under which there is a similar complementarity between equality and competitiveness in poverty reduction.

Suggested Citation

  • Goto, Hideaki, 2008. "Labor Market Competitiveness and Poverty," Working Papers 51159, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:51159
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    References listed on IDEAS

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    More about this item

    Keywords

    inequality; labor productivity; market competitiveness; poverty; Food Security and Poverty; International Development; Political Economy; D6; I32; J2; J64;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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