Browsing by Subject "Search and matching"

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Endogenous technology, matching, and labor unions
does low-skilled immigration affect the technological alignment of the host country?
(2017) Cords, Dario
In recent years, Germany and other European countries face the strongest immigration flow in their history. Experts unanimously agree that one of the core factors of a successful social integration is the labor market participation of the new arrivals. This paper investigates the impact of low-skilled immigration on a unionized economy with labor market frictions. It especially examines how immigration affects the technology choice of firms and, thereby, the technological alignment of the host country. The labor market is characterized by heterogeneity on both sides of the market. Within this framework, it can be shown that low-skilled immigration encourages firms to invest more in a basic technology, which leads to a deterioration of the technology level in the whole economy. It can be further shown that policies, which improve the access of already existing low-skilled immigrants to the labor market counteract the effect that is triggered by an increase in low-skilled immigration.
Technical change, task allocation, and labor unions
(2022) Marczak, Martyna; Beißinger, Thomas; Brall, Franziska
We propose a novel framework that integrates the task approach" for a more precise production modeling into the search-and-matching model with low- and high-skilled workers, and wage setting by labor unions. We establish the relationship between task reallocation and changes in wage pressure, and examine how skill- biased technical change (SBTC) affects the task composition, wages of both skill groups, and unemployment. In contrast to the canonical model with a fixed task allocation, low-skilled workers may be harmed in terms of either lower wages or higher unemployment depending on the relative task-related productivity profile of both worker types. We calibrate the model to the US and German data for the periods 1995-2005 and 2010-2017. The simulated effects of SBTC on low-skilled unemployment are largely consistent with observed developments. For example, US low-skilled unemployment increases due to SBTC in the earlier period and decreases after 2010.