Labor union and the wealth-income ratio

Angus Chu, Zonglai Kou and Xueyue Liu

Economics Letters, 2018, vol. 167, issue C, 29-35

Abstract: We explore how labor union affects the wealth-income ratio in an innovation-driven growth model and find that it depends on the union’s objective. If the union is employment-oriented (wage-oriented), then a decrease in its bargaining power would have a positive (an ambiguous) effect on the wealth-income ratio. Calibrating the model to data, we find that a decrease in union bargaining power causes a sizable increase in the wealth-income ratio, which explains at least one-third of the increase in the US wealth-income ratio.

Keywords: Wealth-income ratio; Labor union; Economic growth (search for similar items in EconPapers)
JEL-codes: D31 J50 O30 O43 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Labor Union and the Wealth-Income Ratio (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:167:y:2018:i:c:p:29-35

DOI: 10.1016/j.econlet.2018.02.023

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