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Employment protection versus flexicurity: on technology adoption in unionised firms

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  • Lommerud, Kjell Erik
  • Straume, Odd Rune

Abstract

We analyse how different labour market institutions--employment protection versus ‘flexicurity’--affect technology adoption in unionised firms. We consider trade unions’ incentives to oppose or endorse labour-saving technology and firms’ incentives to invest in such technology. Increased flexicurity--interpreted as less employment protection and a higher reservation wage for workers--unambiguously increases firms’ incentives for technology adoption. If unions have some direct influence on technology, a higher reservation wage also makes unions more willing to accept technological change. Less employment protection has the opposite effect, since this increases the downside (job losses) of labour-saving technology.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7919.

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Date of creation: Jul 2010
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Handle: RePEc:cpr:ceprdp:7919

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Keywords: Employment protection; Flexicurity; Technology adoption; Trade unions;

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References

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Citations

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Cited by:
  1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2011. "North-South technology transfer in unionised multinationals," CEPR Discussion Papers 8664, C.E.P.R. Discussion Papers.
  2. Ippei Shibata, 2013. "Is Labor Market Mismatch a Big Deal in Japan?," IMF Working Papers 13/196, International Monetary Fund.
  3. Andersen, Torben M, 2010. "Incentive and Insurance Effects of Tax Financed Unemployment Insurance," CEPR Discussion Papers 8025, C.E.P.R. Discussion Papers.

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