Business Intelligence

Right-to-manage Unions Endogenous Growth And Welfare

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Executive Summary

Using the basic overlapping generations one-sector model of endogenous growth the authors show that unionisation of labour markets may be growth-enhancing with respect to the standard competitive equilibrium economy with full employment, provided the capital's weight in technology and the replacement rate are both high enough. Moreover, a growth-maximising value of the union's relative wage intensity does exist. In particular, a wage-oriented rather than an employment-oriented union should be preferred as an inducement to a higher per capita income growth.

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