Unionisation, Unemployment and Economic growth
This paper employs a simple overlapping generations endogenous growth model with an R&D sector to establish a link between union bargaining power, long-run unemployment and long-run growth. The model consists of a competitive final goods sector, two intermediate goods sectors, one competitive and the other a monopoly and a competitive R&D sector. Increased union bargaining power in the monopolized intermediate-goods sector is shown to increase wages and unemployment in the sector and reduce the economy’s long-run growth rate. This result is shown to hold for both closed- and open-shop unions.
|Date of creation:||2002|
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