Working Paper: NBER ID: w20841
Authors: Alberto Alesina; Michele Battisti; Joseph Zeira
Abstract: This paper shows that different labor market policies can lead to differences in technology across sectors in a model of labor saving technologies. Labor market regulations reduce the skill premium and as a result, if technologies are labor saving, countries with more stringent labor regulation, which are binding for low skilled workers, become less technologically advanced in their high-skilled sectors, and more technologically advanced in their low-skilled sectors. We then present data on capital output ratios, on estimated productivity levels and on patent creation, which support the predictions of our model.
Keywords: Labor Market Regulations; Technology Adoption; Skill Premium
JEL Codes: J31; J50; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market regulations (J48) | skill premium (J24) |
| skill premium (J24) | technology adoption in low-skilled sectors (O14) |
| skill premium (J24) | technology adoption in high-skilled sectors (O33) |
| labor market regulations (J48) | technology adoption in low-skilled sectors (O14) |
| labor market regulations (J48) | technology adoption in high-skilled sectors (O33) |
| labor market regulations (J48) | productivity in high-skilled sectors (J24) |
| labor market regulations (J48) | productivity in low-skilled sectors (J24) |
| employment protection legislation (J68) | technology adoption indicators (O33) |
| union density (J50) | technology adoption indicators (O33) |