Capital-skill complementarity is tested for two different definitions of skill, using data from 32 West German manufacturing industries from 1975-1990. Using the Kmenta approximation for the CES function provides strong support for complementarity between white collar workers and capital. On the...

In a 3-factor GE-model with a continuum of ability, the employed choose optimal labour supply, and equilibrium unemployment is determined by benefits funded by wage-and energy-taxes. Aggregate labour and the net wage may increase or decrease with taxation (and unemployment), and conditions for a...