Egalitarianism and Growth

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Egalitarianism and Growth

Author Info

Agell, Jonas
Lommerud, Kjell Erik

Additional information is available for the following registered author(s):

Kjell Erik Lommerud

Abstract

Are competitive wage premia an obstacle to growth? The answer of the architects of the Scandinavian 'model' in the 1950s and 1960s was in the affirmative. By punishing expansive and growth enhancing sectors of the economy, competitive wage premia imposed an unwarranted drag on the rate of structural change. The authors formalize this intuition using a two-sector endogenous growth model, considering both open and closed economy cases. They also show that egalitarian pay compression, combined with active labor market policies, works in the same way as an industrial policy of subsidizing sunrise industries. Copyright 1993 by The editors of the Scandinavian Journal of Economics.

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Publisher Info
Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 95 (1993)
Issue (Month): 4 (December)
Pages: 559-79
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Handle: RePEc:bla:scandj:v:95:y:1993:i:4:p:559-79

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Paper
- Jonas Agell & Kjell Lommerud, 1993. "Egalitarianism and Growth," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich.

Cited by:
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Gilles Saint-Paul, 1996. "Labor market institutions and the cohesion of the middle class," International Tax and Public Finance, Springer, vol. 3(3), pages 385-395, July. [Downloadable!] (restricted)
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Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalization and Union Opposition to Technological Change," CEPR Discussion Papers 4836, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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