A “Managerial” trade union and economic growth

Chang, Juin‐jen; Shaw, Ming-fu; Lai, Ching‐chong

doi:10.1016/j.euroecorev.2005.12.003

Cited by 29 publications

(78 citation statements)

References 28 publications

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“…This result is similar to Chang et al (2007), who consider an AK growth model. Our study di¤ers from Chang et al (2007) by considering an R&D-based growth model.…”

Section: Introductionsupporting

confidence: 76%

“…This result is similar to Chang et al (2007), who consider an AK growth model. Our study di¤ers from Chang et al (2007) by considering an R&D-based growth model. More importantly, the current study di¤ers from all the above studies by exploring how union a¤ects the wealth-income ratio, in addition to employment and growth which have general-equilibrium e¤ects on the wealth-income ratio.…”

Section: Introductionsupporting

confidence: 76%

“…2 Third, the wealth-income ratio has increased; see Figure 3. 3 This study uses an innovation-driven growth model with labor union to explore how declining union bargaining power (re ‡ecting declining union membership in the data) a¤ects the wealth-income ratio. We …nd that declining union power decreases labor income share and increases the wealth-income ratio.…”

Section: Introductionmentioning

confidence: 99%

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Labor union and the wealth-income ratio

2018

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We explore how labor union a¤ects the wealth-income ratio in an innovation-driven growth model and …nd that it depends on the union's objective. If the union is employmentoriented (wage-oriented), then a decrease in its bargaining power would have a positive (an ambiguous) e¤ect on the wealth-income ratio. Calibrating the model to data, we …nd that a decrease in union bargaining power causes a sizable increase in the wealth-income ratio, which explains at least one-third of the increase in the US wealth-income ratio.JEL classi…cation: D31, J50, O30, O43

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“…This result is similar to Chang et al (2007), who consider an AK growth model. Our study di¤ers from Chang et al (2007) by considering an R&D-based growth model.…”

Section: Introductionsupporting

confidence: 76%

Section: Introductionsupporting

confidence: 76%

Section: Introductionmentioning

confidence: 99%

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Labor union and the wealth-income ratio

2018

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“…The economy is populated by decentralized trade unions, so that each intermediate goodsproducing …rm negotiates with a single union i 2 (0; 1) which is too small to in ‡uence the outcome of the market. 11 Unions negotiate the wage on behalf of their members. Once unions are introduced in the analysis, two important issues arise: what is the objective function of the union and what are the variables of the bargaining process.…”

Section: Unions'wage Settingmentioning

confidence: 99%

“…Unions, in this model, do not simply maximize the utility of their members, but are institutions that also have "political" objectives in the sense that their objective function takes into account the preferences of workers, the preferences of leaders and market constraints. In this respect we take side on the old and never settled debate initiated by Dunlop [18] and Ross [44] over the appropriate maximand for the unions'utility function, and we assume that the unions'objective function is a Stone-Geary utility function as in Dertouzos and Pencavel [16], Pencavel [38] and, more recently, by De la Croix et al [15], Raurich and Sorolla [41] and by Chang et al [11]. This function is extremely ‡exible and, depending on parameter values, allows for di¤erent distribution of power, inside the union, between members and leaders who may have diverging objectives.…”

Section: Introductionmentioning

confidence: 99%

Optimal monetary policy in economies with dual labor markets

Mattesini

Rossi

2009

Journal of Economic Dynamics and Control

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We present a DSGE New Keynesian model with indivisible labor and a dual labor market: a walrasian one where wages are fully ‡exible and a unionized one charaterized by real wage rigidity. We show that the negative e¤ect of a productivity shock on in ‡ation and the positive e¤ect of a cost-push shock are crucially determined by the proportion of …rms that belong to the unionized sector. The larger this number, the larger are these e¤ects. Consequently, the larger the union coverage, the larger should be the optimal response of the nominal interest rate to exogenous productivity and cost-push shocks. The optimal in ‡ation and output gap volatility increases as the number of the unionized …rms in the economy increases. JEL codes: E24, E32, E50, J23, J51

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Unionization, market structure, and economic growth

Ji¹,

Chang²,

Huang

2016

Southern Economic Journal

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This article investigates the macroeconomic effects of unionization in a Schumpeterian growth model with an endogenous product market structure and a unionized labor market. The endogeneity of the market structure and the trade unionism of the labor market interact and jointly determine the equilibrium unemployment, firm size, number of firms, economic growth, and distribution of income between workers and firms. We show that unionization governs the distribution of income between workers and firms and the unemployment rate, but it does not give rise to any growth effect on the economy. In addition, unionization discourages potential entrants and hence decreases the equilibrium number of firms. These results echo the empirical observation in the sense that unionization raises unemployment and alters the distribution of income between workers and firms, but it does not give rise to a significant, real impact on the firms investment and the economy-wide growth. It should be noted that as argued by Freeman (2007), this evidence has recently turned out to be fragile. The unemployment effect of collective bargaining appears to be contingent upon other institutional and policy factors that need to be clarified to provide robust policy advice. The estimated coefficients on labor institutions become statistically insignificant with modest changes in the measures of institutions, countries covered, and time period. Models that cover more years, countries, and measures than the early studies provide little support for those who advocate the conventional deregulation of labor markets (Baker et al., 2005). This valuable information was provided to us by an anonymous referee, to whom we are grateful.

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A “Managerial” trade union and economic growth

Cited by 29 publications

References 28 publications

Labor union and the wealth-income ratio

Labor union and the wealth-income ratio

Optimal monetary policy in economies with dual labor markets

Unionization, market structure, and economic growth

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