Industrialization Jobs Creation and Wages Incentives

Joao Ricardo Faria () and Mohamed Jellal ()

MPRA Paper from University Library of Munich, Germany

Abstract: An optimizing representative firm pays efficiency wages to skilled workers to produce technological innovations, which are assumed to be of labor saving type, affecting negatively the hiring rate of unskilled workers. The results are: i) The efficiency wage of skilled workers is determined by the Solow condition; ii) There is underemployment of unskilled workers whenever the added value of innovations is greater than the opportunity cost of skilled workers’ wages; iii) The optimal level of technology is independent of technological parameters; iv) The employment of skilled workers increases with the level of technology and decreases with the efficiency wage; v) The employment of unskilled workers is not necessarily negatively affected by technological innovations in the steady state.

Keywords: Unemployment; Dynamic Efficiency Wage Model; Technological Change (search for similar items in EconPapers)
JEL-codes: J41 O33 D92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge and nep-lab
Date: 2009-09-01
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://mpra.ub.uni-muenchen.de/17185/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:17185

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany
Address: Schackstr. 4, D-80539 Munich, Germany
Contact information at EDIRC.
Series data maintained by Ekkehart Schlicht ().