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The effects of unionization in an R&D growth model with (In)determinate equilibrium

  • Lai, Chung-Hui
  • Wang, Vey
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    This paper extends an R&D-based growth model of the Rivera-Batiz and Romer-type [Quarterly Journal of Economics 106 (1991) 531] endogenous growth model by embodying a union with elastic labor to investigate the effects of unionization on employment and growth by highlighting the essence of internal conflict within the union. It is shown that an increase in the union’s bargaining power or a union which is more employment-oriented boosts employment and economic growth when the balanced growth equilibrium is determinate. On the other hand, if the union is more wage-oriented, employment and economic growth are enhanced when the balanced growth equilibrium is indeterminate.

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    File URL: http://mpra.ub.uni-muenchen.de/27748/1/MPRA_paper_27748.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27748.

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    Date of creation: 07 Nov 2010
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    Handle: RePEc:pra:mprapa:27748
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    1. Tetsugen Haruyama & Jun-ichi Itaya, 2006. "Do Distortionary Taxes Always Harm Growth?," Journal of Economics, Springer, vol. 87(2), pages 99-126, 03.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
    3. Benhabib Jess & Farmer Roger E. A., 1994. "Indeterminacy and Increasing Returns," Journal of Economic Theory, Elsevier, vol. 63(1), pages 19-41, June.
    4. Clark, A., 1989. "Efficient Bargains And The Mcdonald-Solow Conjecture," Papers 350, London School of Economics - Centre for Labour Economics.
    5. Menezes-Filho, Naercio & Van Reenen, John, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.
    6. Palokangas, Tapio, 1996. "Endogenous growth and collective bargaining," Journal of Economic Dynamics and Control, Elsevier, vol. 20(5), pages 925-944, May.
    7. Jörg Lingens, 2009. "Union Wage Bargaining and the Incentive to Innovate," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(2), pages 260-280, June.
    8. Faini, Riccardo, 1999. "Trade unions and regional development," European Economic Review, Elsevier, vol. 43(2), pages 457-474, February.
    9. Ulph, A. M. & Ulph, D. T., 1994. "Labour markets and innovation: Ex-post bargaining," European Economic Review, Elsevier, vol. 38(1), pages 195-210, January.
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