Long-Run Economic Performance and the Labor Market

Alberto Alonso (), E. Cristina Echevarria and Kien C. Tran ()
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Alberto Alonso: Universidad Complutense

Southern Economic Journal, 2004, vol. 70, issue 4, pages 905-919

Abstract: This article uses a simple variation of the Solow model to study the interrelations between economic growth and the labor market. We show, both analytically and empirically, that income and capital per worker in the steady state depend positively on flexibility of the labor market; that the steady-state unemployment rate depends positively on the rate of population growth and the productivity growth rate and negatively on the savings rate and flexibility of the labor market; and, finally, that labor market flexibility affects convergence toward steady state.

JEL-codes: C51 J60 O47 O57 (search for similar items in EconPapers)
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:sej:ancoec:v:70:4:y:2004:p:905-919

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