| Popis: |
The hypothesis that in the long run only supply conditions can explain economic growth has been challenged by research that attaches a central role to demand conditions. In this case, there would be a feedback process in which productivity and labor supply would affect aggregate demand and this would impact the former. Several studies have addressed empirically the impact of growth on productivity and of productivity on growth, but the impact of labor supply on growth and vice versa have not been sufficiently analyzed. This paper aims to investigate whether such a relationship exists for the Brazilian economy, taking into account an important feature of its labor market, namely the high participation of workers in precarious situation in total employment. So the informal side of the labor market would act as a supplier of labor to the formal sector, what would contribute to growth, which in turn would cause formality (informality) to increase (decrease). We estimate a VAR model and find a negative relationship between demand conditions and the number of workers in precarious employment, as well as a positive relationship between the number of workers in the formal market and aggregate demand. |
