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Trade Unions and the Burden of the Public Debt

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Author Info
Erling Steigum ()
Abstract

This paper looks at intergenerational welfare effects of increased public debt when union power in pay bargaining generates structural unemployment. Debt policy works through capital accumulation as well as the price of a fixed asset that is owned by the old generation. Under a reasonable condition, the debt burden on future generations from postponement of the labor tax is larger than in the case of no union power. Under this condition, increased union power also reduces the consumption of future generations.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 587.

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Date of creation: 2001
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Handle: RePEc:ces:ceswps:_587

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Related research
Keywords: public debt; trade unions; intergenerational welfare;

Find related papers by JEL classification:
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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    Other versions:
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    Other versions:
    • Kotlikoff, Laurence J., 2002. "Generational policy," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 27, pages 1873-1932 Elsevier. [Downloadable!] (restricted)
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    Other versions:
  13. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational Accounts - A Meaningful Alternative to Deficit Accounting," NBER Working Papers 3589, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Willem H. Buiter & Kenneth M. Kletzer, 1991. "The Welfare Economics of Cooperative and Noncooperative Fiscal Policy," NBER Working Papers 3329, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer. [Downloadable!] (restricted)
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  20. Fried, Joel & Howitt, Peter, 1988. "Fiscal deficits, international trade and welfare," Journal of International Economics, Elsevier, vol. 24(1-2), pages 1-22, February. [Downloadable!] (restricted)
  21. de la Croix, David & Licandro, Omar, 1994. "Underemployment, Capital Irreversibility and Growth under Trade Unionism," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994003, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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