IDEAS home Printed from https://ideas.repec.org/p/hal/spmain/hal-04090320.html

The impact of deunionization on the growth and dispersion of productivity and pay

Author

Listed:
  • Giovanni Dosi

    (Institute of Economics of Sant'Anna [Pisa] - SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa])

  • Richard Freeman

    (Harvard University)

  • Marcelo Pereira

    (Institute of Economics of Sant'Anna [Pisa] - SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa], UNICAMP - Universidade Estadual de Campinas = University of Campinas)

  • Andrea Roventini

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, Institute of Economics of Sant'Anna [Pisa] - SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa])

  • Maria Enrica Virgillito

    (Institute of Economics of Sant'Anna [Pisa] - SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa])

Abstract

This article presents an Agent-Based Model (ABM) that seeks to explain the concordance of sluggish growth of productivity and of real wages found in macroeconomic statistics, and the increased dispersion of firm productivity and worker earnings found in micro level statistics in advanced economies at the turn of the 21st century. It shows that a single market process unleashed by the decline of unionization can account for both the macro- and micro-economic phenomena, and that deunionization can be modeled as an endogenous outcome of competition between high wage firms seeking to raise productive capacity and low productivity firms seeking to cut wages. The model highlights the antipodal competitive dynamics between a "winner-takes-all economy" in which corporate strategies focused on cost reductions lead to divergence in productivity and wages and a "social market economy" in which competition rewards the accumulation of firm-level capabilities and worker skills with a more egalitarian wage structure.

Suggested Citation

  • Giovanni Dosi & Richard Freeman & Marcelo Pereira & Andrea Roventini & Maria Enrica Virgillito, 2020. "The impact of deunionization on the growth and dispersion of productivity and pay," Sciences Po Economics Publications (main) hal-04090320, HAL.
    • Handle: RePEc:hal:spmain:hal-04090320
    DOI: 10.1093/icc/dtaa025
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dosi, Giovanni & Lamperti, Francesco & Mazzucato, Mariana & Napoletano, Mauro & Roventini, Andrea, 2023. "Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration," Journal of Economic Dynamics and Control, Elsevier, vol. 151(C).
    2. Giovanni Dosi, 2022. "The Agenda for Evolutionary Economics: Results, Dead Ends, and Challenges Ahead," LEM Papers Series 2022/24, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Amendola, Marco & Pereira, Marcelo C., 2025. "State-dependent impulse responses in agent-based models: A new methodology and an economic application," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    4. repec:spo:wpmain:info:hdl:2441/401t6job098n79ch91o9giov9d is not listed on IDEAS
    5. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2022. "Technological paradigms, labour creation and destruction in a multi-sector agent-based model," Research Policy, Elsevier, vol. 51(10).
    6. Giovanni Dosi, 2024. "Why is economics the only discipline with so many curves going up and down? There is an alternative," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(1), pages 1-34, March.
    7. Marco Amendola & Marcelo C. Pereira, 2026. "Are fiscal multipliers state-dependent? Insights from an agent-based model," Journal of Evolutionary Economics, Springer, vol. 36(1), pages 1-34, April.
    8. Rada, Codrina & Tavani, Daniele & von Arnim, Rudiger & Zamparelli, Luca, 2023. "Classical and Keynesian models of inequality and stagnation," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 442-461.
    9. Marcelo S. Tedesco & Gonzalo Marquez, 2025. "Rethinking Competition as a Non-Beneficial Mechanism in Economic Systems," Papers 2506.11405, arXiv.org.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:spmain:hal-04090320. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Contact - Sciences Po Department of Economics (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.