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Technological Change,Labour Contracts and Income Distribution

Author

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  • Fredrik Andersson

    (Department of Economics, Lund University, Sweden)

Abstract

An overlapping-generations model is developed; human capital, embodied in education and general on-the-job training, is important, necessitating investments in the first period of work. Competition among employers combined with shortterm contracting imposes an incentive constraint on the intertemporal wage payments which is costly due to creditmarket imperfections. Workers work too much and are paid too little in the first period. Exogenous technological change complementary with skills aggravates the wage distortion, thereby inducing compensating wage increases. Income taxes mitigate the distortions.

Suggested Citation

  • Fredrik Andersson, 2002. "Technological Change,Labour Contracts and Income Distribution," Finnish Economic Papers, Finnish Economic Association, vol. 15(1), pages 24-35, Spring.
    • Handle: RePEc:fep:journl:v:15:y:2002:i:1:p:24-35
    as

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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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