Innovations, Wages and Demand for Heterogeneous Labour: New Evidence from a Matched Employer-Employee Data-Set

26 Pages Posted: 23 Sep 2000

See all articles by Lutz Bellmann

Lutz Bellmann

Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Thorsten Schank

University of Erlangen-Nuremberg

Date Written: February 2000

Abstract

This paper examines the impact of innovations and wages on the demand for heterogeneous labour. Based on matched data from the IAB-establishment panel survey and the files of the employment statistics register for the year 1995, input shares derived from a generalised Leontief cost function are estimated for six qualification groups (blue and white collar workers stratified into unskilled, skilled and highly-skilled employees) in the West German production industries.

With the exception of highly skilled blue collar workers, innovations have a positive and significant effect on labour demand for all groups, with an estimated relative change of the conditional labour demand ranging between 3.2% and 6.3%. Between white collar workers as well as between unskilled and skilled blue collar workers, we find an increasing positive impact of innovations on labour demand with qualification level. Skilled and highly skilled employees are found to be substitutes for the unskilled. This result implies that more flexible wages of the unskilled would reduce the unemployment of this group. Finally, our data is not consistent with separability of blue-collar employees from white collar employees, there is weak evidence that skilled and highly skilled blue collar employees can be aggregated.

JEL Classification: C31, J23, J31, D21, O31

Suggested Citation

Bellmann, Lutz and Schank, Thorsten, Innovations, Wages and Demand for Heterogeneous Labour: New Evidence from a Matched Employer-Employee Data-Set (February 2000). Available at SSRN: https://ssrn.com/abstract=224112

Lutz Bellmann (Contact Author)

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany
+49 911 179 3046 (Phone)
+49 911 179 3297 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Thorsten Schank

University of Erlangen-Nuremberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

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