Technological Change,Labour Contracts and Income Distribution

Fredrik Andersson ()

Finnish Economic Papers, 2002, vol. 15, issue 1, 24-35

Abstract: An overlapping-generations model is developed; human capital, embodied in education and general on-the-job training, is important, necessitating investments in the first period of work. Competition among employers combined with shortterm contracting imposes an incentive constraint on the intertemporal wage payments which is costly due to creditmarket imperfections. Workers work too much and are paid too little in the first period. Exogenous technological change complementary with skills aggravates the wage distortion, thereby inducing compensating wage increases. Income taxes mitigate the distortions.

JEL-codes: D91 J22 J24 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:fep:journl:v:15:y:2002:i:1:p:24-35

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