The new GLO Discussion Paper proposes a novel framework that integrates the “task approach” to find that low-skilled workers may be harmed in terms of either lower wages or higher unemployment.
GLO Discussion Paper No. 1177, 2022
Technical Change, Task Allocation, and Labor Unions – Download PDF
by Marczak, Martyna & Beissinger, Thomas & Brall, Franziska
GLO Fellow Thomas Beissinger
Author Abstract: We propose a novel framework that integrates the “task approach” for a more precise production modeling into the search-and-matching model with low- and high-skilled workers, and wage setting by labor unions. We establish the relationship between task reallocation and changes in wage pressure, and examine how skill- biased technical change (SBTC) affects the task composition, wages of both skill groups, and unemployment. In contrast to the canonical model with a fixed task allocation, low-skilled workers may be harmed in terms of either lower wages or higher unemployment depending on the relative task-related productivity profile of both worker types. We calibrate the model to the US and German data for the periods 1995-2005 and 2010-2017. The simulated effects of SBTC on low-skilled unemployment are largely consistent with observed developments. For example, US low-skilled unemployment increases due to SBTC in the earlier period and decreases after 2010.
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PUBLISHED
Vol. 35, Issue 4, October 2022: Journal of Population Economics (JOPE): 15 articles https://link.springer.com/journal/148/volumes-and-issues/35-4
CiteScore of JOPE moves up from 3.9 (2020) to 6.5 (2021). LINK
Similar, its Impact Factor is now 4.7 (2021) after 2.8 (2020)! LINK
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
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