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Book part
Publication date: 3 June 2021

Soma Pal, Chandrima Chakraborty and Dipyaman Pal

The present chapter examined the behavior of relative wage rate, productivity of labor, and total factor productivity growth (TFPG) and also attempted to explore the…

Abstract

The present chapter examined the behavior of relative wage rate, productivity of labor, and total factor productivity growth (TFPG) and also attempted to explore the causal relationship between relative wage rate and productivity of labor as well as relative wage rate and TFPG in food and beverage industry in India over the period 1980–1981 to 2017–2018. The result of Sen (2003) approach of endogenous structural break suggests that the series of relative wage rate, productivity of labor, and TFPG follows trend stationary process. A significant break is found for all the three aforementioned variables, being 1984–1985 for relative wage rate and productivity of labor whereas 2007–2008 for TFPG. For the three variables, growth rate has increased after the break. Bidirectional causality between relative wage rate and productivity of labor as well as relative wage rate and TFPG is evident.

Abstract

Details

Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH
Type: Book
ISBN: 978-0-44451-260-4

Book part
Publication date: 16 December 2017

Scott Carter

This essay explores certain aspects of single product industry basic systems of the type Sraffa develops in Part I of Production of Commodities by Means of Commodities. It…

Abstract

This essay explores certain aspects of single product industry basic systems of the type Sraffa develops in Part I of Production of Commodities by Means of Commodities. It focusses on triangular trade as the simplest expression of the more general n-commodity case. Two elements of the framework are explored: (i) the relation of exchange between all commodities, conceived as the configuration of exchange which is applicable to the subsistence and surplus models, and (ii) the value/price expressions of labour time, applicable to the surplus model only, which posits the productivity of, remuneration to and extraction from living labour added to the system. This analysis complements and extends the Marxian reading of Sraffa’s notions of surplus and deficit industries first explored in Carter (2014b). The methodology of ‘given quantities’ in expositing the relations developed is adopted in this essay as it corresponds to the same method employed by Sraffa. This allows readers to easily move from the present essay to Sraffa’s book and importantly his archival notes which are now for all interested parties available as colour digital images on the Wren Library website.

Details

Including a Symposium on New Directions in Sraffa Scholarship
Type: Book
ISBN: 978-1-78714-539-9

Keywords

Article
Publication date: 11 June 2020

Mark Heil

This paper reviews economic studies on the effects of various aspects of finance on labour market outcomes.

Abstract

Purpose

This paper reviews economic studies on the effects of various aspects of finance on labour market outcomes.

Design/methodology/approach

The paper is a systematic literature review that reviews the weight of the evidence on the relationships between specific elements of finance and labour outcomes. The review is divided into three major sections: (1) job quantity and job quality; (2) distributional effects; and (3) resilience and adaptability.

Findings

Finance interacts with labour market institutions to jointly determine labour outcomes. Firm financial structures influence their labour practices – highly leveraged firms show greater employment volatility during cyclical fluctuations, and leverage strengthens firm bargaining power in labour negotiations. Bank deregulation has mixed impacts on labour depending upon the state of prior bank regulations and labour markets. Leveraged buyouts tend to dampen acquired-firm job growth as they pursue labour productivity gains. The shareholder value movement may contribute to short-termism among corporate managers, which can divert funds away from firm capital accumulation toward financial markets, and crowd out productive investment. Declining wage shares of national income in most OECD countries since 1990 may be driven in part by financial globalisation. The financial sector contributes to rising income concentration near the top of the distribution in developed countries. The availability of finance is associated with increased reallocation of labour, which may either enhance or impede productivity growth. Finally, rising interest rate environments and homeowners with mortgage balances that exceed their home's value may reduce labour mobility rates.

Originality/value

This review contributes to the understanding of the effects of finance on labour by reviewing and synthesising a large volume of literature.

Details

Journal of Economic Studies, vol. 47 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

Abstract

Details

Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH
Type: Book
ISBN: 978-0-44451-260-4

Abstract

Details

Economics, Econometrics and the LINK: Essays in Honor of Lawrence R.Klein
Type: Book
ISBN: 978-0-44481-787-7

Article
Publication date: 20 April 2010

Kusum Mundra and Jim Gerber

The purpose of this paper is to examine the effect of cyclical and structural factors on the decline of maquiladora employment. In addition to the US industrial…

Abstract

Purpose

The purpose of this paper is to examine the effect of cyclical and structural factors on the decline of maquiladora employment. In addition to the US industrial production, the cyclical factors examined are relative Mexican US wages, the Mexican exchange rate relative to the US, and US foreign direct investment (FDI). The paper also explores the effect of competition from China, a structural effect, on the decline of maquiladora employment.

Design/methodology/approach

A vector error correction (VEC) model of maquila employment for the period 1980‐2002 is estimated and controlled for US industrial production, FDI flows, relative wage rates of Mexico and USA. To empirically investigate the structural differences of lower costs in Mexico vs China a seemingly unrelated regression (SUR) is estimated across three sectors: apparel and textile, electronic, and transportation.

Findings

From the VEC maquila employment model it is found that, in addition to the strong effect of US industrial production on the maquila employment, there exist significant short‐ and long‐run effects of Mexico US exchange rate and Mexican wages relative to USA on maquila employment. The sectoral (SUR) model shows that competition from China has a bigger adverse effect on relatively labor‐intensive good and commodities which are cheaper to transport (such as textiles) over more bulky transportation goods. The transportation sector has a location advantage, though is more sensitive to the cyclical fluctuations in the US industrial production.

Research limitations/implications

Future research should investigate the role of USA and world FDI exclusively into Mexico and maquiladora sector.

Practical implications

Well designed controls, output choice, and location advantage are important for the growth and viability of small scale manufacturing industries.

Originality/value

The VEC model for maquila employment and the SUR framework across main maquila sectors is the first to account for wages, exchange rate, and FDI in addition to the US industrial production in understanding the decline in maquiladora employment.

Details

Indian Growth and Development Review, vol. 3 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 1 January 1976

ANTHONY CLUNIES ROSS

Unequal Exchange (L'échange inégal) by Arghiri Emmanuel attempts a Marxist treatment of trade between poor and rich countries. Published with it are four appendices in…

Abstract

Unequal Exchange (L'échange inégal) by Arghiri Emmanuel attempts a Marxist treatment of trade between poor and rich countries. Published with it are four appendices in which Charles Bettelheim and Emmanuel debate the issues raised by the main work, and a fifth appendix in which Emmanuel replies to other critics. Emmanuel aims, he says, to address himself “to economists of all tendencies in a common language” (p.323). This aspiration, which is reprehended by Bettelheim (p.349) — either you stand on Marxist ground or you don't — makes the book a particularly interesting one for the non‐Marxist interested in the same range of issues. Though some of the terms used are Marxist or have a peculiarly Marxist meaning, the approach — again to Bettelheim's dismay (p.284) — is through analytical models whose internal logic and empirical realism can be rigorously discussed.

Details

Journal of Economic Studies, vol. 3 no. 1
Type: Research Article
ISSN: 0144-3585

Book part
Publication date: 16 December 2017

Bertram Schefold

Capital theory has taken a new turn with the theoretical discovery that wage curves tend to get linear in random systems, the larger they are, and with the confirmation…

Abstract

Capital theory has taken a new turn with the theoretical discovery that wage curves tend to get linear in random systems, the larger they are, and with the confirmation that empirical wage curves do not deviate a great deal from linearity. The present chapter adds to these results by arguing that reswitching becomes less likely for larger systems, while Wicksell effects are almost surely present. But it can also be shown that the elasticity of substitution is likely to be small in random systems so that a policy to lower real wages will not easily generate much additional employment in a closed economy. A new perspective on employment policies is therefore called for.

Details

Including a Symposium on New Directions in Sraffa Scholarship
Type: Book
ISBN: 978-1-78714-539-9

Keywords

Article
Publication date: 7 January 2019

Masaya Yasuoka

An increase in life expectancy brings about an aging society, necessitating increasing demand for elderly care services. The purpose of this paper is to present an…

Abstract

Purpose

An increase in life expectancy brings about an aging society, necessitating increasing demand for elderly care services. The purpose of this paper is to present an examination of: how an aging society affects the demand for elderly care services and the labor market for elderly care services; how the labor share and wage inequality between the final goods sector and elderly care sector are determined; and whether the subsidy for elderly care service increases demand for elderly care services or not.

Design/methodology/approach

This paper sets the dynamics general equilibrium model with two sectors model: one for final goods sector and the other for elderly care services. This paper derives how the labor supply for elderly care services is determined in the theoretical model. In addition to analytical research works, this paper examines how the subsidy for elderly care service affects the labor share allocated for elderly care sector and wage inequality between the final goods sector and the elderly care sector with the numerical examples.

Findings

Related reports of the literature describe that an aging society raises the share of labor dedicated to elderly care services. However, considering a closed economy in which saving affects the capital stock, an aging society does not always raise the share of labor used for elderly care services because the wage rate of the final goods sector increases with an aging society. This effect prevents the increase of the labor supplied to elderly care services. On the other hand, the subsidy for the elderly care service raises the labor share of elderly care sector.

Research limitations/implications

The related literatures derive that an aging society raises the labor share allocated for elderly care sector. However, the paper shows that the subsidy for elderly care plays an important role in the increase in the labor share of elderly care sector.

Practical implications

This paper examines how the aging society affects the labor share of elderly care sector, wage inequality between final goods sector and elderly care sector and others with numerical examples. Thanks to the numerical examples, this paper derives the quantitative result and shows how the subsidy for elderly care service should be provided.

Originality/value

The author thinks that this paper has rich implications and originality. There exists no literature that examines how the labor share of elderly care sector and the relative wage rate of elderly care sector are determined by the aging and the subsidy for elderly care service. The author thinks that it is a very important analysis because many economically developed countries face the aging society problem.

Details

Journal of Economic Studies, vol. 46 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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