Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7348943 | Economics Letters | 2018 | 13 Pages |
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.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Angus C. Chu, Zonglai Kou, Xueyue Liu,