Entrepreneurship in a Unionised Economy

Vesa Kanniainen and Mikko Leppamaki
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Mikko Leppamaki: University of Helsinki

No 1473, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: This paper shows that labor market institutions are important for the formation of new entreprises and market entry. The effects of different labor market institutions on wage determination, entrepreneurship and firm size are analysed both analytically and illustrated numerically. Models where labor unions are strong in the wage setting are compared to the case of more competitive labor markets. The main result is that union power reduces entrepreneurship in the sense of new entry and results in a decline of the optimal size of enterprises, measured in terms of their hired labor.

Date: 2000-08-01
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Related works:
Working Paper: Entrepreneurship in a Unionised Economy (2000)
Working Paper: Entrepreneurship in a Unionised Economy (2000)
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