Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20486
Authors: 
Palokangas, Tapio
Year of Publication: 
2003
Series/Report no.: 
IZA Discussion paper series 720
Abstract: 
We present a growth model in which R&D increases productivity, union-firm bargaining determines the distribution of rents and the government can support unions by labour market regulation. We show that if unions are initially very strong, regulation increases only the workers? profit share and has no impact on employment and growth. Otherwise, regulation increases wages. Because firms try to escape this cost increase through the improvement of productivity by R&D, the economy grows faster. Regulation (deregulation) is desirable when the growth rate is below (above) some critical level.
Subjects: 
endogenous growth
labour unions
regulation
JEL: 
J50
O40
Document Type: 
Working Paper

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