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Unionized Labour Market, Unemployment Allowances, Productive Public Expenditure And Endogenous Growth
Author(s) -
Bhattacharyya Chandril,
Gupta Manash Ranjan
Publication year - 2015
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12079
Subject(s) - economics , endogenous growth theory , unemployment , labour economics , wage bargaining , growth model , tax rate , unemployment rate , microeconomics , macroeconomics , market economy , human capital
ABSTRACT An endogenous growth model with unionised labour market is developed to analyse the interaction between the tax financed productive public expenditure policy and the unemployment benefit policy. We consider both ‘Efficient Bargaining’ model and ‘Right to Manage’ model; and analyse properties of balanced growth rate maximising income tax policy as well as effects of unionisation. This growth rate maximising income tax rate exceeds the competitive output share of the public input in the presence of an unemployment benefit scheme. The growth effect of unionisation in the ‘Efficient Bargaining’ model and in the ‘Right to Manage’ model are different.