Long‐Run Economic Performance and the Labor Market

Alberto Alonso, E. Echevarria and Kien Tran

Southern Economic Journal, 2004, vol. 70, issue 4, 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.

Date: 2004
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https://doi.org/10.1002/j.2325-8012.2004.tb00611.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:70:y:2004:i:4:p:905-919

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