 A Two-Sector Growth Model with Labour SupplyAustralian Journal of Labour Economics (AJLE), 2005, vol. 8, issue 3, 245-260 Abstract: This paper introduces endogenous time distribution between work and leisure into a two-sector growth model. We differ from the traditional growth theory in that we introduce a novel economic mechanism to determine consumers' decision on time distribution, consumption and saving. The utility maximization solves the problem that there is no profound rational decision mechanism for consumers in the Solow growth model and avoids the complication that the Ramsey growth theory brings about. First, we define the two-sector growth model with the alternative approach to consumer behaviour with endogenous labour supply. Then, we examine dynamic properties of the model when the production functions are specified with the Cobb-Douglas forms. We also simulate the model and demonstrate effects of changes in the propensity to save and technology of the capital good sector over time. The appendix examines dynamic properties of the model when the production functions take on general forms. Keywords: One, Two and Multisector Growth Models; Time Allocation and Labor Supply (hours of work, part-time employment, temporary workers, work sharing, absenteeism, quits, work-life balance) (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ozl:journl:v:8:y:2005:i:3:p:245-260 Access Statistics for this article More articles in Australian Journal of Labour Economics (AJLE) from Bankwest Curtin Economics Centre (BCEC), Curtin Business School Contact information at EDIRC. |
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