Dipartimento di Studi su Diritto, Politica e Socie
Università di Palermo, Piazza Bologni, 8
90134 Palermo, Italy
NBER Working Papers and Publications
|January 2015||Technology and Labor Regulations: Theory and Evidence|
with Alberto Alesina, Joseph Zeira: w20841
This paper shows that different labor market policies can lead to differences in technology across sectors in a model of labor saving technologies. Labor market regulations reduce the skill premium and as a result, if technologies are labor saving, countries with more stringent labor regulation, which are binding for low skilled workers, become less technologically advanced in their high-skilled sectors, and more technologically advanced in their low-skilled sectors. We then present data on capital output ratios, on estimated productivity levels and on patent creation, which support the predictions of our model.