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Employment Flexibility, Dual Labour Markets, Growth, and Distribution
Author(s) -
Krishna Dutt Amitava,
Charles Sébastien,
Lang Dany
Publication year - 2015
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12093
Subject(s) - flexibility (engineering) , economics , labour market flexibility , dual (grammatical number) , term (time) , labour economics , distribution (mathematics) , aggregate demand , income distribution , macroeconomics , inequality , art , mathematical analysis , monetary policy , physics , literature , management , mathematics , unemployment , quantum mechanics
Many policymakers and economists have argued in favour of greater labour market flexibility as a part of structural adjustment reforms that are expected to improve economic performance. Existing post‐Keynesian‐Kaleckian (PKK) models are unable to address these issues because they assume away long‐term labour by allowing employment to be short term and adjusting freely with output. This paper introduces long‐term labour into PKK models. We develop a model that provides alternative ways of modelling labour market flexibility and suggest that when aggregate demand issues are important, an increase in employment flexibility is likely to have adverse growth and distributional impacts.