Verdoorn Law
The Verdoorn law describes a correlation popularized by Nicholas Kaldor , which postulates a linear relationship between the growth of labor productivity as the dependent variable and the growth of production (independent variable) .
Due to advances in productivity , economic growth must exceed a certain limit in order to create new jobs. This employment threshold is determined by Verdoorn's law.
The employment threshold depends on:
- negative from the rate of technical progress ( total factor productivity ) and
- positive from the employment intensity of economic growth.
In Kaldor's technical progress function , the rate of growth in labor productivity depends on the rate of growth in capital intensity .
literature
- Peter Kalmbach (Ed.): Higher labor market flexibility or more flexible economic policy? On the causes of the different employment trends in the USA and in Germany . Bonn 2000, ISBN 3-86077-921-4 , pp. 20ff. ( online )