Sick Leave and the Composition of Work Teams

In this paper, I analyse the relation between workers’ sick leave and the composition of their work teams with respect to age, job tenure, education, and nationality. The probability of sick leave of workers in work teams is shown to be lower if their teammates are older, have shorter job tenure, are less educated, female and of same nationality. In particular, the difference between a worker’s age and the average age of her teammates explains a large part of the well-known positive correlation between age and sick days. In fact, for workers older than 44 years, individual age does not have any significant effect on sick days if the difference between individual age and average team age is held constant. This age difference can be controlled by the management. If older workers have more sick days only if they work in teams with younger workers, it might optimal to form age-homogeneous work teams.

Skill-Biased Technological Change: Is there Hope for the Unskilled?

This paper challenges the common view that skill-biased technological change boosts wage inequality. In a multi-sector economy, relative wages depend not only on relative productivities but also on relative goods prices. If there are complementarities between goods that do not benefit greatly from technological innovations and other goods whose production costs fall in the course of technical progress, the relative price of these "low-tech" goods rises. If the production of these "low-tech" goods is intensive in the use of unskilled labor, unskilled workers benefit from this increase in the relative goods price. This paper presents a simple two-sector, two-factor model of perpetual exogenous skill-biased technological change. The model is able to explain the increase in wage inequality in the 1980s and the subsequent stabilization of the wage structure in the 1990s.

Employment Effects of Skill Biased Technological Change when Benefits are Linked to Per-Capita Income

This paper studies the employment effects of technological change when benefits are endogenous. If the (i) level of welfare aid depends on the general income level in the economy and (ii) wages for unskilled workers cannot fall below the level of welfare aid, there is a link between the wage for unskilled labor and the productivity of skilled labor. An increase in the latter will lead to an increase in average income and hence the level of welfare aid. This in turn leads unions to ask for higher wages for unskilled workers. Technological change is shown to have employment effects (only) if it is skill-biased and if this link exists.

Skill Biased Technological Change and Endogenous Benefits: The Dynamics of Unemployment and Wage Inequality

In this paper, we study the effect of skill-biased technological change on unemployment when benefits are linked to the evolution of average income and when this is not the case. In the former case, an increase in the productivity of skilled workers and hence their wage leads to an increase in average income and hence in benefits. The increased fallback income, in turn, makes unskilled workers ask for higher wages. As higher wages are not justified by respective productivity increases, unemployment rises. More generally, we show that skill-biased technological change leads to increasing unemployment of the unskilled when benefits are endogenous. The model provides a theoretical explanation for diverging developments in wage inequality and unemployment under different social benefits regimes: Analyzing the social legislation in 14 countries, we find that benefits are linked to the evolution of average income in Continental Europe but not in the U.S. and the UK. Given this institutional difference, our model predicts that skill-biased technological change leads to rising unemployment in Continental Europe and rising wage inequality in the U.S. and the UK.

Skill Biased Technological Change and Endogenous Benefits: The Dynamics of Unemployment and Wage Inequality

In this paper, we study the effect of skill-biased technological change on unemployment when benefits are linked to the evolution of average income and when this is not the case. In the former case, an increase in the productivity of skilled workers and hence their wage leads to an increase in average income and hence in benefits. The increased fallback income, in turn, makes unskilled workers ask for higher wages. As higher wages are not justified by respective productivity increases, unemployment rises. More generally, we show that skill-biased technological change leads to increasing unemployment of the unskilled when benefits are endogenous. The model provides a theoretical explanation for diverging developments in wage inequality and unemployment under different social benefits regimes: Analyzing the social legislation in 14 countries, we find that benefits are linked to the evolution of average income in Continental Europe but not in the U.S. and the UK. Given this institutional difference, our model predicts that skill-biased technological change leads to rising unemployment in Continental Europe and rising wage inequality in the U.S. and the UK. --Unemployment,Skill-Biased Technological Change,Benefits

Skill-biased technological change : is there hope for the unskilled?

This paper challenges the common view that skill-biased technological change boosts wage inequality. In a multi-sector economy, relative wages depend not only on relative productivities but also on relative goods prices. If there are complementarities between goods that do not benefit greatly from technological innovations and other goods whose production costs fall in the course of technical progress, the relative price of these "low-tech" goods rises. If the production of theses "low-tech" goods is intensive in the use of unskilled labor, unskilled workers benefit from this increase in the relative goods price. This paper presents a simple two-sector, two-factor model of perpetual exogenous skill-biased technological change. The model is able to explain the increase in wage inequality in the 1980s and the subsequent stabilization of the wage structure in the 1990s

On the Evolution of Wage Inequality in Acemoglu's Model of Directed Technical Change

In Acemoglu's model of directed technical change, the skill-premium increases in consequence of an increase in the relative supply of skilled labor. In this paper, I argue that other measures of wage inequality such as the Gini-coefficient do not necessarily rise as well. The Gini-coefficient depends positively on the skill-premium but the effect of an increase in the relative supply of skilled labor is ambiguous. A simulation of Acemoglu's model shows that the growth in the relative supply of skilled labor has led to increased wage inequality in the past but will lead to decreasing wage inequality in the future

Employment Effects of Skill-Biased Technical Change When Benefits are Linked to Indices of Standards of Living

This paper studies the employment effects of skill-biased technological change under the assumption that the level of social security benefits depends on the general income level in the economy. In models of wage bargaining, wages---especially at the lower end of the wage distribution---typically depend on the level of unemployment or social security benefits. These benefits are generally considered exogenous. In practice, however, benefits are often linked to indices of standards of living. Endogeneity of the level of benefits leads to an interdependence between wages and benefits. As a consequence, the wage for unskilled labor is linked to the wage for skilled labor. Technological change is shown to have employment effects (only) if it is ``skill-biased'' AND if this link between the wages for different skills exists.Unemployment, Skill Biased Technical Change, Wage Bargaining