Labor Market Competitiveness and Poverty

How does labor market competitiveness frame the impact of greater labor productivity and lower inequality on poverty? Specifically, does greater competitiveness increase the impact of higher labor productivity and lower inequality on poverty reduction? In a simple model, we show that there is complementarity between competitiveness and productivity – the greater is one, the larger is the impact of the other. This suggests that improving labor market competitiveness is worthwhile not only for its own sake, but because it improves the transmission mechanism from productivity increases to poverty reduction. We also derive precise conditions under which there is a similar complementarity between equality and competitiveness in poverty reduction.


Issue Date:
Sep 28 2008
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/51159
Total Pages:
19
JEL Codes:
D6; I32; J2; J64
Series Statement:
Working Paper
WP 2008-20




 Record created 2017-04-01, last modified 2017-08-25

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