Search results

1 – 10 of 13
Content available
Article
Publication date: 11 November 2019

Robert Beyer, Chetan Ghate and Martin Rama

251

Abstract

Details

Indian Growth and Development Review, vol. 12 no. 2
Type: Research Article
ISSN: 1753-8254

Article
Publication date: 20 June 2019

Chetan Ghate and Debojyoti Mazumder

Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through…

Abstract

Purpose

Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through public workfare programs. The authors refer to this as employment targeting. The purpose of the paper is to consider different labor market effects of employment targeting in a stylized model of a developing economy. In the context of a simple search and matching friction model, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector.

Design/methodology/approach

The model is an application of a search and matching model of labor market frictions, where agents have heterogeneous abilities. The authors introduce a public sector alongside the private sector in the economy. Wage in the private sector is determined through Nash bargaining, whereas the public sector wage is exogenously fixed. In this setup, the public sector hiring rate influences private sector job creation and hence the overall employment rate of the economy. As an extension, the authors model the informal sector coupled with the other two sectors. This resembles developing economies. Then, the authors check the overall labor market effects of employment targeting through public sector intervention.

Findings

In the context of a simple search and matching friction model with heterogeneous agents, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Employment targeting can, therefore, have perverse effects on labor market outcomes. The authors also find that it is possible that the private sector wage falls as a result of an increase in the public sector hiring rate, which leads to more job creation in the private sector.

Originality/value

What is less understood in the literature is the impact of employment targeting on the size of the informal sector in developing economies. The authors fill this gap and show that public sector intervention can have perverse effects on overall job creation and the size of the informal sector. Moreover, a decrease in the private sector wage due to a rise in public sector hiring reverses the consensus findings in the search and matching literature which show that an increase in public sector employment disincentivizes private sector vacancy postings.

Details

Indian Growth and Development Review, vol. 12 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

Content available
Article
Publication date: 18 April 2008

Satya P. Das and Chetan Ghate

373

Abstract

Details

Indian Growth and Development Review, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8254

Content available

Abstract

Details

Indian Growth and Development Review, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8254

Content available
Article
Publication date: 17 April 2009

Margaret Adolphus

331

Abstract

Details

Indian Growth and Development Review, vol. 2 no. 1
Type: Research Article
ISSN: 1753-8254

Content available
Article
Publication date: 11 January 2008

626

Abstract

Details

International Journal of Social Economics, vol. 35 no. 1/2
Type: Research Article
ISSN: 0306-8293

Content available
Article
Publication date: 12 April 2013

Devashish Mitra and Priya Ranjan

2254

Abstract

Details

Indian Growth and Development Review, vol. 6 no. 1
Type: Research Article
ISSN: 1753-8254

Book part
Publication date: 8 November 2021

Siddhartha Chattopadhyay

Sufficiently persistent rise in nominal interest increases inflation rate in short-run. This short-run comovement of nominal interest rate and inflation rate is known as…

Abstract

Sufficiently persistent rise in nominal interest increases inflation rate in short-run. This short-run comovement of nominal interest rate and inflation rate is known as Neo-Fisherianism. This chapter proposes a policy based on Neo-Fisherianism to escape Zero Lower Bound (ZLB) using a textbook Forward Looking New Keynesian Model. I have shown that proposed policy with properly chosen inflation target and persistence can stimulate economy and escape ZLB by raising nominal interest rate. I have also shown that the proposed policy is robust to varying degrees of price stickiness.

Details

Environmental, Social, and Governance Perspectives on Economic Development in Asia
Type: Book
ISBN: 978-1-80117-594-4

Keywords

Content available
Article
Publication date: 22 April 2020

Dibyendu Maiti and Surender Kumar

Abstract

Details

Indian Growth and Development Review, vol. 13 no. 1
Type: Research Article
ISSN: 1753-8254

Article
Publication date: 17 August 2021

Sriparna Goswami and Bidisha Chakraborty

This paper aims to understand the differing impacts of wealth distribution on human capital accumulation and skilled-unskilled labour generation under three educational…

Abstract

Purpose

This paper aims to understand the differing impacts of wealth distribution on human capital accumulation and skilled-unskilled labour generation under three educational paradigms as follows: private, public and a system of mixed education.

Design/methodology/approach

The authors use an overlapping generations model.

Findings

The wealth dynamics show that both in the private education system and public education system, there are two possible outcomes- stagnation and steady growth depending on the efficiency of the education system, skill premium and other parameters. The choice of the education system through voting is discussed. It is found that skilled workers would always vote for private education whilst unskilled workers vote for private education if public education expenditure of the economy is low.

Research limitations/implications

The study is subject to several limitations. This paper considers the rate of interest and wage rate to be exogenously given, and thus ignores the general equilibrium effects. The authors do not consider the labour-leisure choice. The introduction of labour leisure choice in the model would alter many of the results. The authors do not consider heterogeneous ability across individuals. The analysis of the differential efficiency of the different education systems needs further, rigorous research. Also, this paper does not consider other occupations such as entrepreneurship and self-employment. This paper considers the labour demand function to be perfectly elastic, and hence, does not consider any demand constraint. What happens if bequests are taxed? What happens if parents are not altruistic? These questions may be addressed in future research.

Social implications

If the proportion of tax paying skilled labour is low in any country, pure public education may not be able to generate sustained human capital growth. For countries with a sufficiently large proportion of skilled labour, the public education system would be successful. On the other hand, if skill premium is low or the education system is poorly managed private education system may fail too.

Originality/value

Whilst investigating the effects of public vs private education on growth and development in the presence of unequal wealth distribution, The authors have tried to address a few questions. First, why the public education system has been successful in skill accumulation in developed countries whilst it has failed to do so in less developed countries? Second, why do some countries with mostly privately run educational institutions perform much better in human capital production whilst others do not? Third, in an economy with unequal wealth distribution, what are the factors that result in public or private education as a voting equilibrium outcome?

Details

Indian Growth and Development Review, vol. 14 no. 3
Type: Research Article
ISSN: 1753-8254

Keywords

1 – 10 of 13