Technology and Labor Regulations

Alesina, Alberto and Zeira, Joseph (2007) Technology and Labor Regulations. [Working Paper]. p. 47. Working Papers (No. 0729).

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Abstract/Index

Many low skilled jobs have been substituted away for machines in Europe, or eliminated, much more so than in the US, while technological progress at the “top”, i.e. at the high-tech sector, is faster in the US than in Europe. This paper suggests that the main difference between Europe and the US in this respect is their different labor market policies. European countries reduce wage flexibility and inequality through a host of labor market regulations, like binding minimum wage laws, permanent unemployment subsidies, firing costs, etc. Such policies create incentives to develop and adopt labor saving capital intensive technologies at the low end of the skill distribution. At the same time technical change in the US is more skill biased than in Europe, since American skilled wages are higher. In the last few years some partial labor market reforms in Europe may have started to slow down or even reverse this trend.


Item Type:Report / Paper (Working Paper)
Research documents and activity classification:Working Papers > Non-Refereed Working Papers / of national relevance only
Divisions:Department of Business and Management
Additional Information:A revised version of the paper is available under subscription in "NBER Working Papers" no. 12581, National Bureau of Economic Research, Inc. http://www.nber.org/papers/w12581
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited By:Maria Teresa Nistico
Deposited On:21 Dec 2010 15:18
Last Modified:21 Dec 2010 15:18

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