The waste model of decision-making in higher education

• Authors: Balla K. , Kollo J. , Simonovits A.
• Languages of publication: HU

Abstracts

EN

The study extends the familiar Aghion-Blanchard model to a case where delayed adjustment of wages causes firms in the emerging private sector to create jobs in various geographical and employment segments of the economy at temporarily different profit rates and therefore speeds. Assuming two sectors, the authors examine the development of employment, wages, taxes and profits up to the point of full absorption of the shock of systemic change: a far longer period than the actual transition or dismantling of the state sector. Viability depends on the pace of job destruction and the initial shock effect on employment. The temporarily viable paths are influenced at once by benefits, taxation, and any employment subsidies available. It is shown that there exists a subsidy policy leading not only to greater equality, but to higher aggregate employment and total income. The effect of subvention is strongest where job destruction is rapid and benefits are high (a transition such as Hungary's).

Keywords

EN

EMPLOYMENT SUBSIDIES; JOB DESTRUCTION'S PACE; PROFIT RATES; WAGES' DELAYED ADJUSTMENT

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Committee for Economic Sciences of the Hungarian Academy of Sciences
• Journal: Kozgazdasagi Szemle (Economic Review)
• Year: 2006
• Volume: 53
• Issue: 6
• Pages: 485-508
• Document type: ARTICLE

Contributors

author

Balla K.

author

Kollo J.

author

Simonovits A.

• K. Balla, no address given, contact the journal editor,

Identifiers

CEJSH db identifier

07HUAAAA02986077