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Labor supply and the no-growth trap

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  • Guilherme Strifezzi Leal
  • David Turchick

Abstract

We include elastic labor supply and risk aversion in a standard vertical innovation model in order to address four main questions. First, under what conditions will we find workers in the R&D sector of the economy? Second, under what conditions will these workers actually do any research? Third, can a simple redistributive policy provide an escape route from the so-called no-growth trap? And fourth, to what extent is this policy capable of correcting the inherent inefficiencies of the model?

Suggested Citation

  • Guilherme Strifezzi Leal & David Turchick, 2019. "Labor supply and the no-growth trap," Working Papers, Department of Economics 2019_54, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2019wpecon54
    as

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    File URL: http://www.repec.eae.fea.usp.br/documentos/Leal_Turchick_54WP.pdf
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    References listed on IDEAS

    as
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    3. Cecilia García-Peñalosa & Jean-François Wen, 2008. "Redistribution and entrepreneurship with Schumpeterian growth," Journal of Economic Growth, Springer, vol. 13(1), pages 57-80, March.
    4. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
    5. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
    6. Mayshar, Joram, 1977. "Should Government Subsidize Risky Private Projects?," American Economic Review, American Economic Association, vol. 67(2), pages 20-28, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    labor supply; Schumpeterian growth; income redistribution; no-growth trap; research effort;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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