Unions, growth and unemployment

Rüdiger Wapler

No 206, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: We extend the standard quality-ladder model with heterogeneous workers by including efficiency wages and unions. We find that higher union bargaining power leads to a negative relationship between growth and unemployment. An increase in the supply of human capital, however, on the one hand induces firms to substitute high-skilled labour for jobs previously performed by low-skilled individu- als and on the other hand, increases the demand for low-skilled labour as their productivity rises due to the higher skill-intensity. Depending on which effect dominates, either a positive or negative relationship between the growth and unemployment rates results.

Keywords: Unions; Umemployment; Growth; Heterogenerous Labour (search for similar items in EconPapers)
JEL-codes: J31 J51 O31 O41 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:206

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