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

Weiss, Matthias

URL: https://ideas.repec.org/p/xrs/gkwopa/2000-02.html
Document Type: Working paper
Year of publication: 2000
The title of a journal, publication series: GK Working Paper Series
Volume: 00-02
Place of publication: Mannheim
Publication language: English
Institution: School of Law and Economics > Graduiertenkolleg VWL/BWL
Subject: 330 Economics
Abstract: 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.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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