Employment Flexibility, Dual Labour Markets, Growth, and Distribution

Dany Lang and Sebastien Charles

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Abstract: Many policymakers and economists have argued in favour of greater labour market flexibility as a part of structural adjustment reforms that are expected to improve economic performance. Existing post-Keynesian-Kaleckian (PKK) models are unable to address these issues because they assume away long-term labour by allowing employment to be short term and adjusting freely with output. This paper introduces long-term labour into PKK models. We develop a model that provides alternative ways of modelling labour market flexibility and suggest that when aggregate demand issues are important, an increase in employment flexibility is likely to have adverse growth and distributional impacts.

Keywords: post-Keynesian-Kaleckian models; income distribution; employment flexibility; dual labour markets (search for similar items in EconPapers)
Date: 2015-09-24
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Citations: View citations in EconPapers (9)

Published in Metroeconomica, 2015

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Journal Article: Employment Flexibility, Dual Labour Markets, Growth, and Distribution (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01366002

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