Fiscal adjustment and labor market dynamics in an open economy

• 成果类型: Article
• 署名作者: Agénor, PR
• 署名单位: University of Manchester
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2003.11.002
• 发表日期: 2005
• 页码: 97-125
• 关键词: labor market segmentation; Trade unions; public sector prices

摘要

This paper studies the labor market effects of fiscal adjustment in a two-sector, three-good intertemporal framework. Key features of the model are an informal sector, minimum wages, unionized labor in the formal economy, imperfect labor mobility, and public production of intermediate inputs. Luxury and wait unemployment prevail in equilibrium. It is shown that if unions care sufficiently about employment, and if the degree of openness is high, an increase in the price of government services may reduce unemployment in the steady state. A similar result would hold in an efficiency-wage setting if the disciplinary effect of unemployment is sufficiently strong. (C) 2004 Published by Elsevier B.V.