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Can Market Power influence Employment, Wage Inequality and Growth?

  • Alberto BUCCI

    ([n.a.])

  • Fabio FIORILLO

    ()

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Stefano STAFFOLANI

    ()

    (Universita' Politecnica delle Marche, Dipartimento di Economia)

We introduce an efficiency wage mechanism into an innovation-driven growth model. Due to asymmetric information problems the labour market is segmented and homogeneous workers may be employed either in the non-competitive intermediate sector or in the competitive research sector. We analyse the impact that the monopoly position enjoyed by intermediate firms in the product market may have on employment, wage inequality and growth, and the sectoral distribution of workers. We find that the lower the product market competition in the capital goods sector, the higher the research employment, the lower the intermediate sector employment and the higher the growth rate. The relationships between growth and inequality, on the one hand, and between growth and employment, on the other, are both negative. Copyright Blackwell Publishing Ltd 2003.

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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 141.

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Length: 21
Date of creation: Oct 2000
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Handle: RePEc:anc:wpaper:141
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  1. Aghion, Philippe & Howitt, Peter, 1996. " Research and Development in the Growth Process," Journal of Economic Growth, Springer, vol. 1(1), pages 49-73, March.
  2. Dale T. Mortensen & Christopher A. Pissarides, 1998. "Technological Progress, Job Creation and Job Destruction," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(4), pages 733-753, October.
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  8. Fabio FIORILLO & Stefano STAFFOLANI, 2000. "To redistribute or not? Unemployment benefit, workfare and citizen's income in a dual labour market," Working Papers 128, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  9. Mathias Dewatripont & Philippe Aghion & Patrick Rey, 1997. "Corporate governance, competition policy and industrial policy," ULB Institutional Repository 2013/9613, ULB -- Universite Libre de Bruxelles.
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  14. Bucci, Alberto, 1998. "Market Power and Growth in a Schumpeterian Framework of Innovation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1998024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  16. repec:cai:recosp:reco_p1991_42n3_0469 is not listed on IDEAS
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  27. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
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  29. Philippe Aghion & Peter Howitt, 1998. "Market Structure and the Growth Process," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 276-305, January.
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