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  
 

Abstract

 

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

 

 
   

 

    Back