Labour Market Institutions and Technological Employment

In: Economica, Band 78, Heft 309, S. 159-186

Abstract

Our paper seeks to gain insights into the effect of labour market institutions on the dynamics of the labour market during the diffusion process of new technologies. We develop an endogenous job destruction matching framework, with heterogeneous workers, where the segmentation of the labour market between workers having the required ability to do a technological job and the rest of the workers is endogenous. The dynamics of this segmentation may follow a monotonous decreasing path or a non‐monotonous U‐shaped path depending on the unemployment benefit system. If benefits are generous, we are in the U‐shaped case.