| Vesa Kanniainen, University of Helsinki Mikko Leppamaki, University of Helsinki |
| Entrepreneurship in a Unionised Economy |
| Session: C-1-23 Friday 11 August 2000 by Leppamaki, Mikko |
| This paper shows that labor market institutions are important for the formation of new entreprises and market entry. The effects of different labor market institutions on wage determination, entrepreneurship and firm size are analysed both analytically and illustrated numerically. Models where labor unions are strong in the wage setting are compared to the case of more competitive labor markets. The main result is that union power reduces entrepreneurship in the sense of new entry and results in a decline of the optimal size of enterprises, measured in terms of their hired labor. |
| Submitted paper full-text in .pdf |