Technical change, task allocation, and labor unions

Martyna Marczak, Thomas Beissinger () and Franziska Brall

No 05-2022, Hohenheim Discussion Papers in Business, Economics and Social Sciences from University of Hohenheim, Faculty of Business, Economics and Social Sciences

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.

Keywords: ask approach; search and matching; labor unions; skill-biased technicalchange; labor demand; wage setting (search for similar items in EconPapers)
JEL-codes: E23 E24 J51 J64 O33 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-hrm and nep-lab
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Related works:
Working Paper: Technical Change, Task Allocation, and Labor Unions (2022)
Working Paper: Technical Change, Task Allocation, and Labor Unions (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hohdps:052022

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