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

Market Work, Home Production, Consumer Demand and Unemployment among the Unskilled

We propose and test a general equilibrium model in which longer working time and higher labor force participation lead to a fall in unemployment. Longer working hours and higher labor force participation have two direct effects: People have higher incomes and less (leisure) time. This has implications for the composition of consumer demand, since people spend less time on home production. Instead, they outsource more domestic tasks to the market. Consumer demand shifts toward unskill-intensive goods. The relative demand for unskilled labor rises and unemployment falls. We test our model in two ways: First, we study the link between labor market partici- pation, home production and the demand for household and similar services using the German time use survey conducted in 1991/92. Second, we use cross-country time- series data on OECD countries between 1980 and 2003 to directly examine the link between labor force participation and the unemployment rate. The empirical results corroborate the predictions from the theoretical model.

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

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

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