Integration, Labor Market Regulation, Lobbying, and Technological Change

Tapio Palokangas

No 4096, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines an economic union where oligopolistic firms produce by skilled and unskilled labor and do in-house R&D by skilled labor. The planner of the union accepts new members to the union, regulates the labor market through a minimum wage for unskilled labor and supports firms by taxation. Firms and workers lobby the planner for prospective policy. It is shown that in the political equilibrium small unions regulate the labor market but do not support firms, while large unions deregulate the labor market and support firms.

Keywords: economic integration; minimum wage; market power; endogenous technological change (search for similar items in EconPapers)
JEL-codes: F15 J50 O40 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-03
New Economics Papers: this item is included in nep-lab and nep-pol
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