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Technological Complexity, Wage Differentials and Unemployment

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  • Alberto Dalmazzo

Abstract

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: J31; O33

Suggested Citation

  • Alberto Dalmazzo, 2002. "Technological Complexity, Wage Differentials and Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 515-530, December.
    • Handle: RePEc:bla:scandj:v:104:y:2002:i:4:p:515-530
    DOI: 10.1111/1467-9442.00299
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    Cited by:

    1. von Siemens, Ferdinand A. & Kosfeld, Michael, 2014. "Team production in competitive labor markets with adverse selection," European Economic Review, Elsevier, vol. 68(C), pages 181-198.
    2. Jacky Chin & Herlina & Shu-Chiang Lin & Satria Fadil Persada & Choesnul Jaqin & Ilma Mufidah, 2020. "Preventive maintenance model for heating ventilation air conditioning in pharmacy manufacturing sector," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 11(1), pages 45-53, February.
    3. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    4. Li Yu & Peter F. Orazem, 2014. "O-Ring production on U.S. hog farms: joint choices of farm size, technology, and compensation," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 431-442, July.
    5. Tom Broekel, 2019. "Using structural diversity to measure the complexity of technologies," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-23, May.
    6. Sándor Juhász & Tom Broekel & Ron Boschma, 2021. "Explaining the dynamics of relatedness: The role of co‐location and complexity," Papers in Regional Science, Wiley Blackwell, vol. 100(1), pages 3-21, February.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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