This paper examines the impact of technological innovation on wages using a panel of UK manufacturing firms. We utilize a headcount measure of major innovations between 1945-83 combined with share price and accounting information. Innovating firms are found to have higher average wages, but...

This Paper studies the inter-temporal problem of a monopolistic firm that engages in productivity-enhancing innovations to reduce its labour costs. If the level of wages is sufficiently low, the firm's rate of productivity growth approaches the rate of wage growth and eventually the firm reaches...

In this paper we construct a simple model of the effects of immigration on the labour market outcomes of natives. In this model, skilled and unskilled labour are substitutes, immigrants are complementary to the former, and wages are determined by bargaining. We are able to prove that,...

In this paper we develop a fully game-theoretic version of the right-to-manage model of firm-level bargaining where strategic interactions among firms are explicitly recognized. Our main aim is to investigate how equilibrium wages and employment react to changes in the labour and product...

A microeconomic theoretical model shows that two factors - the compensation and progressivity effects - produce the shifting (if any) of tax rates on wage formation. From an analytical viewpoint, they may be positive or negative and of equal or different sign. A microfounded nested macroeconomic...

A transformation of what had become a universal 40-hour standard working week in Germany began in 1985 with reductions negotiated in the metal-working and printing sectors. These reductions have continued through 1995, and were followed by reductions in other sectors. The union campaign aimed to...

The paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. It is shown that, in the absence of a social planner, the firm has ex-post monopsonistic power that drives...

We examine how technological change affects wage inequality and unemployment in a calibrated model of matching frictions in the labour market. We distinguish between two polar cases studied in the literature: a ‘creative destruction’ economy where new machines enter chiefly through new...

This paper introduces a labour force participation choice into a standard labour market matching model embedded in a dynamic stochastic general equilibrium set-up. The participation choice is modelled as a trade-off between forgoing the expected benefits of being search active and engaging in...

This Paper considers a matching model of heterogeneous workers and jobs, which includes on-the-job search. High-educated workers transitorily accept unskilled jobs and continue to search for skilled jobs. We study the implications of this model for the unemployment rates of high and low-educated...