بازار کار ناقص و همگرایی: تئوری و شواهد برای برخی از کشورهای OECD
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|17786||2003||20 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Policy Modeling, Volume 25, Issue 8, November 2003, Pages 837–856
In this paper, we show the existence of a negative relationship between long run growth and labor market imperfections both theoretically and empirically. We consider a “monopolistic union” imperfect labor market in a neoclassical growth framework and show that labor market rigidity, captured by the mark-up over the reservation wage, does lower the growth rate along the transitional path. For policy purposes, this result implies that removing labor market imperfections in Europe is important not only for reducing unemployment but also for fostering output growth. In this respect, the traditional evaluation of these policies has greatly been underestimated for their beneficial effects on output growth. We verify empirically the convergence relationship implied by the model on a panel of 18 OECD countries using both traditional cross-countries growth regression and the system GMM estimator proposed by Arellano and Bover (1995) and Blundell and Bond (1998). The data support the basic implications of our model. In particular, the standard proxies for mark-up, the unemployment replacement ratio and union density, result to affect the long run growth rate negatively. We also analyze the relationship between growth and an alternative mark-up proxy based on Bean’s (1994a) insight: the ratio of per worker wage on per capita consumption. A negative and significant relationship between output growth rate and this mark-up proxy is found.
Policies aimed at enhancing long run economic growth refer mostly to physical and human capital accumulation, macroeconomic stability, R&D and infrastructure (OECD, 2000b) but ignore labor market functioning. On the other hand, many invoked labor market reforms toward more flexibility do not consider the possible effects on long run growth (OECD, 1999). This fact can be in part explained by the traditional dichotomy in tackling the issues of unemployment and long run growth as well as by the uncertainty surrounding the links between these two economic phenomena. In fact, the links between unemployment and growth proposed recently in the literature are far from being univocal. Pissarides (1990), for example, considers the effects of an exogenous rate of productivity growth in a labor market model of the “search” type. He finds a positive relationship between productivity growth and the rate of job creation that causes a decrease in unemployment rate for a given flow of unemployed agents. An “inverted U” relationship between innovation and unemployment is derived in Aghion and Howitt, 1991, Aghion and Howitt, 1992 and Aghion and Howitt, 1994 where the authors consider both the re-allocation of jobs that accompanies the innovation processes as well as the positive effect on capital accumulation due to innovations. In the two preceding approaches the causality links are from growth to unemployment although it is natural to consider the opposite direction as well. Bean and Pissarides (1993) consider an overlapping generation growth model with an imperfect labor market where the higher the equilibrium unemployment the lower the pool of saving of the current generation that in turn lowers the growth rate of the economy. Daveri and Tabellini (2000), also in an overlapping generation context, consider a monopolistic union that is able to transfer all increases in labor taxes on firms. Firms observe decreasing returns to capital in trying to substitute costly labor factor and restrain capital investment lowering the growth rate of the economy. Other authors explore the possible effects of unemployment upon human capital accumulation. Bean and Layard (1989) are the first to our knowledge to suggest the possibility of a deterioration of human capital due to an extended period of unemployment. This idea has been developed by Podrecca (1998) whose model implies a negative relationship between equilibrium unemployment rate and long run growth whereas during the transitional dynamics, the two can be positively related depending on the parameters values. Saint Paul (1991) instead in a stylized two sectors endogenous growth model inserts an “efficiency wage” mechanism that implies a positive relationship between unemployment and growth. Connected to the innovation process and labor market imperfections as in Aghion and Howitt (1994) the model by Bertola (1994) imply a negative link between growth and unemployment. Firms in his economy operate in a set up a’ la Grossman and Helpmann (1991) or Romer (1990) and they are subject to idiosyncratic shocks due to product innovations calling for labor force re-allocations. To the extent that rigidity of labor market prevents firms from adjusting their labor factor, labor market imperfection causes a lower innovation rate and a higher unemployment rate. A positive relationship is found in Aghion and Saint Paul (1991), although their model belongs more appropriately to a business cycle approach. In fact, firms in their model find convenient to innovate the production processes during recession periods and therefore a positive association between productivity growth and unemployment is observed. Van Schaik Anton and De Groot Henri (1998) propose a two sectors R&D model where a trade off between growth and unemployment is obtained when more competitive environment is introduced in the high-tech sector. However, an opposite result is obtained by Peretto P.F. (2000) who, in a somehow similar set up, underlines the scale effect in the innovative sector. In his model pro-flexibility Labor market reforms reduce costs, ease new entries and enlarge the scale of the economy, fostering growth and decreasing the unemployment further. As we have seen from the above short, and certainly partial, review of the literature the proposed links between growth and unemployment are different and frequently opposite in sign. In general the researchers turned their attention mostly toward endogenous growth models. This is probably due to the fact that the exogeneity of technological progress of the standard neoclassical growth model implies that long run growth rate and the rate of unemployment are independent, even in the presence of an imperfect labor market ( Gordon, 1995). Nevertheless the exogenous growth model has not been dismissed by the empirical growth literature which among other things underlined the importance of the transition dynamics and the convergence processes toward steady states and within economies ( Temple, 1999). Turning our attention toward the transitional dynamics we are able to show that the independency between the long run growth rate and the rate of unemployment does not hold anymore. In fact we show that, in a neoclassical exogenous growth model with an imperfect labor market, labor market rigidity does influence negatively the growth of the economy along the convergence process. As long as convergence is a longtime process, labor market imperfections might be among the determinants of economic growth. The results we obtain have important policy implications as well. They imply that policies aimed at reducing unemployment could also be growth promoting. In turn this suggests that the benefits deriving from such policies have been greatly underestimated so far. In the empirical section we test the empirical relationships implied by our theory on a panel of 18 OECD countries. In particular we estimate the convergence growth equations derived by the model both in a standard cross-countries growth regressions set up and in a dynamic panel data context using the system GMM estimator recently proposed by Arellano and Bond (1995) and Blundell and Bond (1998). As implied by the model, we found a negative impact on growth of standard measure of labor market imperfections such as the unemployment replacement ratio and union density. We also analyze a model relationship between growth and an alternative imperfection proxy based on Bean’s (1994a) insight. This proxy, the ratio of per worker wage on per capita consumption, is found to negatively affect growth in accordance with the theory.
نتیجه گیری انگلیسی
In this paper we explore both theoretically and empirically the possible effects of an imperfect labor market on growth. We show that considering an imperfect labor market with a monopolistic union in a neoclassical growth model the degree of labor market imperfection does affect the growth rate along the transitional path. In the empirical part of the paper we test the model implications on a panel of 18 OECD countries. The analysis is performed in a standard cross-countries growth regression framework as well as in a panel data context applying the system GMM estimator proposed by Arellano and Bond (1995) and Blundell and Bond (1998). We find that the standard proxies of mark-up suggested in the literature, namely the unemployment replacement ratio and the union power, have negative long run growth effects. We propose an alternative mark-up proxy that should capture the Bean’s (1994) insight and implicitly tests for one of our model’s assumptions: the ratio of per capita wage over per capita consumption. This variable appears to influence negatively and significantly the growth of output. Both the theoretical and empirical analyses we present imply that labor market imperfections have long run growth effects. In turn, these findings suggest that the costs of these imperfections are likely to be greatly underestimated in the literature. On the other hand the good news is that, according to our theory and the empirical evidence, policies aimed toward a better functioning of the labor market could not only reduce unemployment (OECD, 1999) but also foster long run growth.