TY  - RPRT
        AU  - Goerke, Laszlo
AU  - Hillesheim, Inga
        TI  - Relative Consumption, Working Time, and Trade Unions
        PY  - 2013/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 7471
        UR  - https://www.iza.org/index.php/publications/dp7471
        AB  - 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.
        KW  - relative consumption
KW  - hours of work
KW  - trade union
KW  - externality
        ER  -