Abstract

http://ssrn.com/abstract=279822
 
 

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Can Market Power Influence Employment, Wage Inequality and Growth?


Alberto Bucci


University of Milan - Dipartimento di Economia Politica e Aziendale (DEPA)

Fabio Fiorillo


Università Politecnica delle Marche - Faculty of Economics

Stefano Staffolani


Università Politecnica delle Marche - Faculty of Economics

January 26, 2001


Abstract:     
We introduce an efficiency-wage mechanism into an innovation-driven growth model. Due to informational problems, the labor market is segmented and homogeneous workers may be employed either in a non-competitive intermediate sector or in a competitive research one. We analyze the impact that variations in the monopoly power of the intermediate firms may have on unemployment, wage inequality and growth. We find that the lower the product market competition in the intermediate sector, the higher the research employment, the lower the intermediate sector employment, the higher the aggregate growth rate. Growth and inequality are negatively correlated whereas growth and unemployment are positively correlated. The last two results are obtained through numerical simulations.

Number of Pages in PDF File: 26

Keywords: Efficiency wages, research and development, endogenous growth, market power

JEL Classification: D43, D92, J41, O3

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Date posted: August 13, 2001  

Suggested Citation

Bucci, Alberto and Fiorillo, Fabio and Staffolani, Stefano, Can Market Power Influence Employment, Wage Inequality and Growth? (January 26, 2001). Available at SSRN: http://ssrn.com/abstract=279822 or http://dx.doi.org/10.2139/ssrn.279822

Contact Information

Alberto Bucci (Contact Author)
University of Milan - Dipartimento di Economia Politica e Aziendale (DEPA) ( email )
Via Mercalli, 23
20122-Milano
Italy
+39(0)2 50321.463 (Phone)
+39(0)2 50321.505 (Fax)
Fabio Fiorillo
Università Politecnica delle Marche - Faculty of Economics ( email )
Piazzale Martelli, 8
60121 Ancona
Italy
Stefano Staffolani
Università Politecnica delle Marche - Faculty of Economics ( email )
Piazzale Martelli, 8
60121 Ancona
Italy
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