Fiscal Policy in Unionized Labor Markets

DSpace/Manakin Repository

Fiscal Policy in Unionized Labor Markets

Citable link to this page

 

 
Title: Fiscal Policy in Unionized Labor Markets
Author: Ardagna, Silvia
Citation: Ardagna, Silvia. 2007. Fiscal policy in unionized labor markets. Journal of Economic Dynamics and Control 31(5): 1498-1534.
Full Text & Related Files:
Abstract: This paper investigates the effects of fiscal policy on economic activity, public finances, welfare, and income distribution in a dynamic general equilibrium model with a unionized labor market. The paper shows that debt-financed increases of public employment, wages of public sector employees, unemployment benefits, and labor taxes put pressure on unions’ wage claims, leading to higher private sector wages, lower employment, capital, and output. In addition, increases of public employment, public wages and unemployment benefits increase workers’ utility relative to the pre-policy change equilibrium during the transition, but not in the long-run. Instead, workers’ utility decreases at any time horizon when labor taxes increase. Capitalists always benefit from increases in taxes on labor but their welfare decreases when public spending goes up. Finally, the paper investigates the extent to which the way the government balances its budget affects these results.
Published Version: http://dx.doi.org/10.1016/j.jedc.2006.05.009
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:2580048
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)

 
 

Search DASH


Advanced Search
 
 

Submitters