Unionization, market structure, and economic growth

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 equilibr...

Full description

Saved in:
Bibliographic Details
Published in:Southern economic journal 2016-01, Vol.82 (3), p.935-951
Main Authors: Ji, Lei, Chang, Juin-Jen, Huang, Chien-Yu
Format: Article
Language:English
Subjects:
Economic growth
Economic growth models
Economic models
Empirical evidence
Employment
Final goods
Financial market structures
Growth models
Intermediate goods
JEL Classification: O4
Labor market
Labor unionization
Labor unions
Labour market
Market size
Unemployment
Unionization
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary: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.
ISSN:0038-4038
2325-8012
DOI:10.1002/soej.12111