SENIORITY WAGES AND ECONOMIC GROWTH
Economies that lack well‐developed markets for mobilizing household savings may, in some instances, grow faster than those that are financially more developed, provided that their labour markets are also characterized by seniority rather than spot wages. This occurs because of a Kaldorian redistribution effect in a model where households have finite‐horizons and where older workers, as an endogenous feature, have higher saving rates.
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Document Type: Research Article
Affiliations: University of Nottingham
Publication date: 2011-12-01