abstract: 'This paper examines the equilibrium optimality with consumption-induced

  social comparisons in a unionized economy which entails unemployment. We

  show that social comparisons of consumption lead to excessive labor

  supply for employed workers, but trade unionism results in

  under-employment. When conspicuous consumption meets trade unionism, the

  labor force exhibits an ``intensive margin{''''} under which the excessive

  labor supply caused by social comparisons of consumption is restrained

  by unionization. Conspicuous consumption can then achieve the social

  sub-optimum, without a need for government intervention, creating no

  distortions in consumption, capital accumulation, and output in a

  competitive equilibrium. When social comparisons in consumption are more

  intensive, a higher degree of unionization is required for restoring

  optimality. Given a specific degree of social comparison in consumption,

  a higher degree of unionization is socially desirable if the output

  elasticity of labor, the elasticity of labor supply, or the elasticity

  of substitution between working hours and employment is high. By

  contrast, a lower degree of unionization is socially desirable when the

  trade union displays a more favorable orientation toward wages. By

  shedding light on the role of trade unionism, our study also provides a

  reconciliation of the disparity between the theoretical prediction and

  the empirical findings.'
affiliation: 'Chang, JJ (Corresponding Author), Acad Sinica, Inst Econ, Taipei 115,
  Nankang, Taiwan.

  Chang, Juin-jen; Wang, Wei-neng, Acad Sinica, Inst Econ, Taipei 115, Nankang, Taiwan.

  Liu, Chia-ying, Aletheia Univ, Dept Econ, Taipei, Taiwan.'
author: Chang, Juin-jen and Liu, Chia-ying and Wang, Wei-neng
author-email: jjchang@econ.sinica.edu.tw
author_list:
- family: Chang
  given: Juin-jen
- family: Liu
  given: Chia-ying
- family: Wang
  given: Wei-neng
da: '2023-09-28'
doi: 10.1016/j.jmacro.2018.06.006
eissn: 1873-152X
files: []
issn: 0164-0704
journal: JOURNAL OF MACROECONOMICS
keywords: 'Conspicuous consumption; Trade unionism; Intensive/extensive margin of

  labor supply; Social optimum'
keywords-plus: 'SOCIAL-STATUS; ECONOMIC-GROWTH; LEISURE; EMPLOYMENT; JONESES;

  EXTERNALITIES; EFFICIENCY; NETWORKS; TAXATION; INCOME'
language: English
month: SEP
number-of-cited-references: '50'
pages: 350-366
papis_id: 4bebac4d7f9e5a48a5afe42ee0c2bda6
ref: Chang2018conspicuousconsumpti
researcherid-numbers: Chang, Juin-Jen/ABD-9235-2022
times-cited: '1'
title: Conspicuous consumption and trade unionism
type: Article
unique-id: WOS:000445989000022
usage-count-last-180-days: '0'
usage-count-since-2013: '9'
volume: '57'
web-of-science-categories: Economics
year: '2018'