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Trade Union Objectives and Economic Growth

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Author Info
Andreas Irmen
Berthold U. Wigger

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Abstract

A trade union whose purpose is to raise wages above the competitive level may foster economic growth if it succeeds in shifting income away from the owners of capital to the workers and if the workers' marginal propensity to save exceeds the one of capitalists. We make this point in an overlapping generations framework with unionized labor. Considering a monopoly union which cares for wages and employment, we determine a range of trade union objectives and characterize the aggregate technology so that the union's policy spurs per capita income growth. However, the union's policy cannot lead to a Pareto-improvement.

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Publisher Info
Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 59 (2002/2003)
Issue (Month): 1 (February)
Pages: 49-
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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(2002/200302)59:1_49:tuoaeg_2.0.tx_2-u

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Find related papers by JEL classification:
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, vol. 83(5), pages 1184-98, December. [Downloadable!] (restricted)
    Other versions:
  3. Berthold U. Wigger, 1999. "Public Pensions and Growth," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 241-, June.
  4. Cahuc, Pierre & Michel, Philippe, 1996. "Minimum wage unemployment and growth," European Economic Review, Elsevier, vol. 40(7), pages 1463-1482, August. [Downloadable!] (restricted)
    Other versions:
  5. Wigger, Berthold U, 2001. "Pareto-Improving Intergenerational Transfers," Oxford Economic Papers, Oxford University Press, vol. 53(2), pages 260-80, April.
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  6. Uhlig, Harald & Yanagawa, Noriyuki, 1996. "Increasing the capital income tax may lead to faster growth," European Economic Review, Elsevier, vol. 40(8), pages 1521-1540, November. [Downloadable!] (restricted)
  7. Agell, Jonas & Lommerud, Kjell Erik, 1993. " Egalitarianism and Growth," Scandinavian Journal of Economics, Blackwell Publishing, vol. 95(4), pages 559-79, December.
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  8. Rosen, Sherwin, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," Review of Economic Studies, Blackwell Publishing, vol. 36(106), pages 185-96, April. [Downloadable!] (restricted)
  9. Bertola, Giuseppe, 1996. "Factor shares in OLG models of growth," European Economic Review, Elsevier, vol. 40(8), pages 1541-1560, November. [Downloadable!] (restricted)
  10. Jones, Larry E. & Manuelli, Rodolfo E., 1992. "Finite lifetimes and growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 171-197, December. [Downloadable!] (restricted)
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  11. Saint-Paul, Gilles, 1992. "Fiscal Policy in an Endogenous Growth Model," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1243-59, November. [Downloadable!] (restricted)
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  12. Pencavel, John H, 1984. "The Tradeoff between Wages and Employment in Trade Union Objectives," The Quarterly Journal of Economics, MIT Press, vol. 99(2), pages 215-31, May. [Downloadable!] (restricted)
  13. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alexander Kemnitz, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  2. G. Bellettini & C. Berti Ceroni, 2004. "A positive analysis of immigration policy," Working Papers 520, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
  3. Jörg Lingens, 2002. "The Impact of a Unionised Labour Market in a Schumpeterian Growth Model," Labor and Demography 0207003, EconWPA. [Downloadable!]
  4. Giorgio Bellettini & Carlotta Berti Ceroni, 2005. "When the Union Hurts the Workers: A Positive Analysis of Immigration Policy," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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