Health, education and endogenous growth

The purpose of the paper is to show that, from a growth perspective, government resources can be spent in two different ways. Resources can be allocated to uses which support growth, and to uses which generate growth. We take the provision of health services as an example of the first type of use, and the provision of educational services as an example of the second. This enables us to integrate both types of uses of scarce resources in an endogenous growth framework and to derive the optimum mix of the provision of health and educational services both from the perspective of health as a complement to growth and health as a substitute for growth. The model illustrates that there is a trade-off between growth as such and the provision of health-services. It also shows that a slow down in growth could be expected to occur when the preference for health is positively influenced by a growing income per head or in the case of an ageing population. Finally, we show that the model can account for a ’growth take off’ in countries which are too poor to save, and that this take off can be induced by ’just the right’ amount of income transfer to those countries : too little aid doesn’t seem to help at all, while too much aid unnecessarily burdens the long term solvability of the receiving country if aid is provided in the form of loans.economic development an growth ;

An O ( n log n ) algorithm for the two-machine ow shop problem with controllable machine speeds

Paper presented at the AEA-Conference in Göteborg, Sweden, 9-11 May 1996 In this paper we discuss the influence of tax shifting on wages and employment. The paper is related to earlier research in this field, both for the Netherlands and for other European welfare states. Our approach differs since we pay explicit attention to the well-known theoretical result that it does not matter which side of the market is taxed (Dalton''''s Law). We will analyse the mechanisms behind tax shifting. Further we want to analyse whether a shift from employers'''' to employees'''' burden has an influence on wages and employment. The paper discusses the influence of taxes on wages and employment in various bargaining settings: the perfect competition model, right-to-manage models (including that of bilateral monopoly) and efficiency wage models are analysed. We conclude that the results depend on the framework that is used in the description of wage setting behaviour. The theorem that it is irrelevant which side of the market is taxed, does not hold for right-to-manage and efficiency wage models. In estimations for the Netherlands, the elasticity of wage costs with respect to employers'''' taxes is usually found to lie around 0.9, whereas the elasticity with respect to employees'''' taxes usually is found to lie around 0.4. This apparent violation of Dalton''''s Law has never been explained before. However, it can be explained from our analysis. Moreover, we show the importance of this result for the impact of a recent tax reform in the Netherlands on wages.public economics ;

On trickling chimneys and other unemployment misery

Abstract not availablelabour economics ;

Wage Divergence and Asymmetries in Unemployment in a Model with Biased Technical Change

In this article we assume two levels of skills and two classes of goods, one produced with a technology requiring high skills, the other produced with a technology that can be operated by both low and high skilled workers. Our model generates two distinct labour market regimes. In one regime we show technical change can be the cause of wage divergence between skilled and unskilled workers. This result is consistent with recent evidence on wage differentials. Adding the Phillips-effect shows this wage divergence can be "traded off" against unemployment of low skilled workers, and hence explains evidence on skill asymmetries in unemployment. Under the alternative regime these effects do not exist but high skilled workers may replace low skilled workers driving them out of their jobs.economics of technology ;

A three-sector endogenous growth model with combined technological change : the choice between basic innovations and quality improvements

Abstract not availableeconomics of technology ;