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Integration, Labor Market Regulation, Lobbying, and Technological Change

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  • 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.

Suggested Citation

  • Palokangas, Tapio K., 2009. "Integration, Labor Market Regulation, Lobbying, and Technological Change," IZA Discussion Papers 4096, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp4096
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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