Autori
Fanti, Luciano
Gori, Luca

Titolo
Are the regulation of wages and unemployment always detrimental for economic growth?
Periodico
Economia politica
Anno: 2009 - Volume: 26 - Fascicolo: 3 - Pagina iniziale: 511 - Pagina finale: 529

Although the debate about the effects of the regulation of wages is long lasting, little attention has been paid to the role played by minimum wages in inter-temporal contexts with endogenous fertility. This paper investigates such effects within a standard OLG model of neoclassical growth. Some new results, so far escaped closer scrutiny, emerge: introducing a regulated wage may, despite the unemployment occurrence, (i) have a favourable impact on both capital accumulation and output per capita; (ii) reduce the population growth rate. This occurs more likely when a sufficiently high capital share as well as significant unemployment benefits do coexist. Moreover we show that such results also hold even with exogenous fertility and lump-sum taxation on the elderly. Therefore, we conclude that under suitable conditions the Stigler's (1946) result that the regulation of wages always causes a production loss may be violated, that is, in a dynamical context a regulated-wage economy may perform better than a market-wage economy, and the higher is the unemployment rate the higher is the (neoclassical) economic growth. Furthermore, we argue that the minimum wage may also be treated as a policy parameter to control population growth.



SICI: 1120-2890(2009)26:3<511:ATROWA>2.0.ZU;2-3
Testo completo: http://www.mulino.it/ws/rwDirectDownload.php?doi=10.1428/31002
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