Relative Consumption, Working Time, and Trade Unions

Arbeitspapier

Status considerations with respect to consumption give rise to negative externalities because individuals do not take into account that their decisions affect the relative consumption position of others. Further, status concerns create incentives for excessive labour supply in competitive markets. We show that trade unions which are unable to internalise the externality can nevertheless mitigate the resulting distortion. The reason is that wages above the market clearing level are only feasible if people work less and, therefore, fewer hours than in a competitive market. Accordingly, the theoretical model establishes that trade unions can have a welfare-enhancing role in a world with relative consumption effects.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 7471

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Externalities ; Time Allocation and Labor Supply ; Trade Unions: Objectives, Structure, and Effects
• Thema: externality ; hours of work ; relative consumption ; trade union

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Goerke, Laszlo ; Hillesheim, Inga
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2013

Weitere Informationen

• Handle: http://hdl.handle.net/10419/80667
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ