Parente and Prescott's Theory May Work in Practice But Does Not Work in Theory
Journal
The B.E. Journal of Macroeconomics
ISSN
1555-0486
ISSN-Digital
1935-1690
Type
journal article
Date Issued
2003-08-25
Author(s)
Abstract
In this paper we challenge Parente and Prescott's (1999) theoretical framework, which establishes that unions use their control of "work practices" to thwart the efficient use of technology in the firms. We argue instead that unions, despite endowing monopoly rights over a technology, should tend to impose its efficient use. In fact if union members care about labor disutility, along with wage incomes, they will dictate "work practices" consistent with operating technology at full efficiency, in order to allow workers to enjoy more leisure. Our result is more general than Parente and Prescott's and does not rely on the particular specification of preferences.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
De Gruyter
Publisher place
Berlin
Volume
3
Number
1
Start page
8
End page
8
Pages
1
Subject(s)
Eprints ID
222083