Journal of Economics and Management  
  Volume 14, No. 2  
  August, 2018  

The Effects of Unionization in an R&D Growth Model


with (In)determinate Equilibrium

  Chung-Hui Lai  

Department of Accounting, Feng Chia University, Taiwan

  Chen-Sheng Yang  
  Department of International Business, Central Taiwan University of Science and Technology, Taiwan  



This paper extends an R&D-based growth model of the Rivera-Batiz and Romer-type [Quarterly Journal of Economics 106 (1991) 531] endogenous growth model by embodying a union with elastic labor to investigate the effects of unionization on employment and growth by highlighting the essence of internal conflict within the union. It is shown that an increase in the union’s bargaining power or a union which is more employment-oriented boosts employment and economic growth when the balanced growth equilibrium is determinate. On the other hand, if the union is more wage-oriented, employment and economic growth are enhanced when the balanced growth equilibrium is indeterminate.




Keywords: union, collective bargaining, R&D, indeterminacy, endogenous growth  



JEL classification: J50, O30, O40