IDEAS home Printed from https://ideas.repec.org/a/adr/anecst/y2020i138p49-76.html
   My bibliography  Save this article

Complementarity Between Low- and High-Skilled Workers and the Employment Impact of Tax versus Human Capital Policies

Author

Listed:
  • Clément Carbonnier

Abstract

The present paper analyses theoretically the impact of substitutability and complementarity between labour market segments on the efficiency of policies tackling low-skilled unemployment. Based on a search and matching model with multiple segments interacting through the production function, it is shown that the efficiency of cost policies - decreasing payroll taxes on low-skill segments - increases with the segments' substitutability. Reducing the relative cost of low-skill labour - through tax wedge decrease - induces labour demand increase if low-skill labour is substitute to other production factors. The efficiency of productivity policies - upgrading workers from lower to higher-skill segments - increases with their complementarity. Enhancing human capital allows increasing production - constrained by the scarcity of high-skill labour - hence increases low-skill labour demand if factors are complements. Consequently, variations of the efficiency of both policies may derive from the technological change, modifying the complementarity between segments.

Suggested Citation

  • Clément Carbonnier, 2020. "Complementarity Between Low- and High-Skilled Workers and the Employment Impact of Tax versus Human Capital Policies," Annals of Economics and Statistics, GENES, issue 138, pages 49-76.
  • Handle: RePEc:adr:anecst:y:2020:i:138:p:49-76
    DOI: 10.15609/annaeconstat2009.138.0049
    as

    Download full text from publisher

    File URL: https://www.jstor.org/stable/10.15609/annaeconstat2009.138.0049
    Download Restriction: no

    File URL: https://libkey.io/10.15609/annaeconstat2009.138.0049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Unemployment Policies; Labor Taxation; Workforce Skills;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:2020:i:138:p:49-76. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ensaefr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Secretariat General or Laurent Linnemer (email available below). General contact details of provider: https://edirc.repec.org/data/ensaefr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.