This paper extends the Goodwin model of distributive cycles by incorporating the simultaneous endogeneity of technical change and labor supply within a classical-Marxian framework. It reinterprets induced innovation, suggesting that firms optimize mechanization to maximize cost reduction, obtaining a micro-founded relationship between mechanization and the wage share. Additionally, it assumes a positive relationship between labor supply and the employment rate. The resulting three-dimensional dynamical system includes wage share, employment rate, and capital-output ratio as state variables. The Hopf bifurcation theorem reveals the emergence of limit cycles as the employment rate's effect on labor productivity (reserve-army-creation effect) approximates a critical value from below. Numerical simulations for 10 OECD countries illustrate the cyclical nature of the model and its consistency with empirical patterns. Furthermore, a sensitivity analysis explores the effect of parameters variations, emphasizing the social dimensions of productivity and labor supply as critical factors defining the stability of distributive cycles.