Unemployment and Income-Distribution Effects of Economic Growth: A Minimum-Wage Analysis with Optimal Saving
Richard Brecher and
Till Gross ()
No 17-08, Carleton Economic Papers from Carleton University, Department of Economics
Theoretically and numerically, we analyze the unemployment and income-distribution effects of economic growth, in a model with optimal saving (investment) and a minimum wage for unskilled labor. Within this three-factor model (including skilled labor), an exogenous rise in the growth rate increases unemployment if capital and unskilled labor are complements (versus substitutes), implying a trade-off between (faster) growth and (lower) unemployment. We also show how the growth rate affects the skill premium and factor shares of national income, providing little support for Piketty’s (2014) controversial thesis that capital’s share is higher when growth is slower.
Keywords: Optimal growth; Minimum wage; Unskilled unemployment; Income distribution (search for similar items in EconPapers)
JEL-codes: E24 O41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-06-12, Revised 2017-07-14
New Economics Papers: this item is included in nep-cmp, nep-dge, nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Published: Carleton Economic Papers
Downloads: (external link)
Journal Article: Unemployment and income‐distribution effects of economic growth: A minimum‐wage analysis with optimal saving (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:car:carecp:17-08
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Carleton Economic Papers from Carleton University, Department of Economics C870 Loeb Building, 1125 Colonel By Drive, Ottawa Ontario, K1S 5B6 Canada.
Bibliographic data for series maintained by Sabrina Robineau ().