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Unemployment, Growth and the Organisation of Work

Author

Listed:
  • Henri L.F. de Groot

    (Dept. of Spational Economic, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Anton B.T.M. van Schaik

    (Department of Economics, Tilburg University)

Abstract

We develop a two-sector endogenous growth model with a dual labour market resulting from the presence of an effort extraction function in one sector. Effort of workers can be influenced by pay and monitoring. This results in an endogenous non-competitive wage differential between sectors and a monitoring intensity that is a source of fixed costs for the firm. Growth is driven by investments in R&D performed in the high-wage sector. Unemployment is determined by the costs and benefits of waiting for a high-paid job. The wage structure, growth, and unemployment are shown to depend on the way effort is extracted.

Suggested Citation

  • Henri L.F. de Groot & Anton B.T.M. van Schaik, 2002. "Unemployment, Growth and the Organisation of Work," Tinbergen Institute Discussion Papers 02-017/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20020017
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    References listed on IDEAS

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    More about this item

    Keywords

    endogenous growth; unemployment; effort extraction; dual labour market;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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