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Technological Complexity, Wage Differentials and Unemployment
Author(s) -
Dalmazzo Alberto
Publication year - 2002
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00299
Subject(s) - economics , unemployment , wage inequality , technological change , labour economics , wage , efficiency wage , production (economics) , inequality , microeconomics , macroeconomics , mathematical analysis , mathematics
A model is developed to analyse the relation between wages and technological complexity, as characterised by the “O–ring” theory of production. In equilibrium, the adoption of a relatively complex technology induces the employer to pay higher wages. We argue that the model can explain increased within–group wage inequality as a consequence of increased technological heterogeneity among firms. JEL classification : J 31; O 33
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