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Integration, Labor Market Regulation, Lobbying, and Technological Change

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Author Info

  • Palokangas, Tapio K.

    ()
    (University of Helsinki)

Abstract

This paper examines an economic union where oligopolistic firms produce by skilled and unskilled labor and do in-house R&D by skilled labor. The planner of the union accepts new members to the union, regulates the labor market through a minimum wage for unskilled labor and supports firms by taxation. Firms and workers lobby the planner for prospective policy. It is shown that in the political equilibrium small unions regulate the labor market but do not support firms, while large unions deregulate the labor market and support firms.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4096.

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Length: 21 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4096

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Related research

Keywords: economic integration; minimum wage; market power; endogenous technological change;

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