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Learning for Employment, Innovating for Growth

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  • Falkinger, Josef
  • Zweimüller, Josef

Abstract

We present a model in which workers have to be educated to get employed and firms have to innovate in order to increase productivity. Education as well as innovation and production require skilled labour as inputs. This and the fact that learning opportunities differ across workers determine simultaneously the long-run level of employment and the long-run rate of growth. We study the impact of changes in the education of workers and the incentives to innovate. Lower profits imply lower growth rates but not necessarily less employment. The effects of redistributive policy measures among workers depend on the form of redistribution. Subsidization of education increases employment and growth. Redistribution through the tax and benefit system or social net has the opposite effect.

Suggested Citation

  • Falkinger, Josef & Zweimüller, Josef, 1998. "Learning for Employment, Innovating for Growth," CEPR Discussion Papers 1856, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1856
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    Cited by:

    1. Haoming Liu & Jinli Zeng, 2008. "Determinants of Long‐Run Unemployment," Southern Economic Journal, John Wiley & Sons, vol. 74(3), pages 775-793, January.

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    More about this item

    Keywords

    Education; Employment; Endogenous Growth; Innovation;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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