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Trade Union Objectives and Economic Growth

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  • Andreas Irmen

    (University of Mannheim)

  • Berthold U. Wigger

    ()
    (University of Mannheim and CSEF, University of Salerno)

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 and increases welfare of all generations that adhere to the union.

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Bibliographic Info

Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 34.

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Date of creation: 01 Mar 2000
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Publication status: Published in FinanzArchiv, 2002, vol. 59, pages 49-67
Handle: RePEc:sef:csefwp:34

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Keywords: Trade union; Overlapping generations; Factor shares; Endogenous technical change; Employment;

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References

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  1. Berthold U. Wigger, 2000. "Pareto-improving intergenerational transfers," CSEF Working Papers 37, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  2. Rosen, Sherwin, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," Review of Economic Studies, Wiley Blackwell, vol. 36(106), pages 185-96, April.
  3. Bertola, Giuseppe, 1991. "Factor Shares and Savings In Endogenous Growth," CEPR Discussion Papers 576, C.E.P.R. Discussion Papers.
  4. Bertola, Giuseppe, 1996. "Factor shares in OLG models of growth," European Economic Review, Elsevier, vol. 40(8), pages 1541-1560, November.
  5. Saint-Paul, G., 1991. "Fiscal Policy In An Endogenous Growth Model," DELTA Working Papers 91-04, DELTA (Ecole normale supérieure).
  6. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  7. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
  8. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September.
  9. John H. Pencavel, 1982. "The Trade-Off between Wages and Employment in Trade Union Objectives," NBER Working Papers 0870, National Bureau of Economic Research, Inc.
  10. 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.
  11. Larry E. Jones & Rodolfo E. Manuelli, 1990. "Finite Lifetimes and Growth," NBER Working Papers 3469, National Bureau of Economic Research, Inc.
  12. Cahuc, P. & Michel, P., 1992. "Minimum Wage, Unemployment and Growth," Papiers d'Economie Mathématique et Applications 92.35, Université Panthéon-Sorbonne (Paris 1).
  13. Agell, Jonas & Lommerud, Kjell Erik, 1993. " Egalitarianism and Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 559-79, December.
  14. Berthold U. Wigger, 1999. "Public Pensions and Growth," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 241-, June.
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Citations

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Cited by:
  1. Giorgio Bellettini & Carlotta Berti Ceroni, 2005. "When the Union Hurts the Workers: A Positive Analysis of Immigration Policy," CESifo Working Paper Series 1421, CESifo Group Munich.
  2. Kemnitz, Alexander, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," Discussion Papers 616, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  3. Chang, Juin-jen & Shaw, Ming-fu & Lai, Ching-chong, 2007. "A "Managerial" trade union and economic growth," European Economic Review, Elsevier, vol. 51(2), pages 365-384, February.
  4. G. Bellettini & C. Berti Ceroni, 2004. "A positive analysis of immigration policy," Working Papers 520, Dipartimento Scienze Economiche, Universita' di Bologna.
  5. Fanti, Luciano & Gori, Luca, 2010. "On economic growth and minimum wages," MPRA Paper 25842, University Library of Munich, Germany.
  6. Luca Gori & Luciano Fanti, 2009. "Right-to-manage unions endogenous growth and welfare," Economics Bulletin, AccessEcon, vol. 29(2), pages 903-917.
  7. Fanti, Luciano & Gori, Luca, 2010. "Child policy solutions for the unemployment problem," Economics Letters, Elsevier, vol. 109(3), pages 147-149, December.
  8. Tsoukis, Christopher & Tournemaine, Frederic, 2010. "Social conflict, growth and factor shares," MPRA Paper 23365, University Library of Munich, Germany, revised 20 Jun 2010.
  9. Lingens, Jorg, 2003. "The impact of a unionised labour market in a Schumpeterian growth model," Labour Economics, Elsevier, vol. 10(1), pages 91-104, February.
  10. Jörg Lingens, 2002. "The Impact of a Unionised Labour Market in a Schumpeterian Growth Model," Labor and Demography 0207003, EconWPA.
  11. Renato BALDUCCI & Stefano STAFFOLANI, 2003. "Short-Run Bargaining, Factors Shares and Growth," Working Papers 188, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  12. Andreas Irmen, 2009. "Frictional unemployment, labor market institutions, and endogenous economic growth," Economics Bulletin, AccessEcon, vol. 29(2), pages 1127-1138.
  13. Carlotta Berti Ceroni & Giorgio Bellettini, 2004. "Unions and the political economy of immigration," 2004 Meeting Papers 494, Society for Economic Dynamics.

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