Trade Union Objectives and Economic Growth
University of Luxembourg - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Munich
Berthold U. Wigger
University of Mannheim - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
CEPR Discussion Paper No. 3027
A trade union whose purpose is to raise wages above the competitive level may foster economic growth if it succeeds in shifting income away from the owners of capital to the workers and if the workers' marginal propensity to save exceeds that of capitalists. We make this point in an overlapping generations framework with unionized labor. Considering a monopoly union that cares for wages and employment, we determine a range of trade union objectives and characterize the aggregate technology so that the union's policy spurs per capita income growth and increases the welfare of all generations that adhere to the union.
Number of Pages in PDF File: 24
Keywords: Trade union, overlapping generations, factor shares, endogenous technical change, employment
JEL Classification: D91, E25, J51, O41working papers series
Date posted: November 8, 2001
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