Employment protection versus flexicurity: on technology adoption in unionised firms
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.
- Author(s)
- Kjell Erik Lommerud, Odd Rune Straume
- Editor(s)
- Centre for Economic Policy Research
- Year of publication
- July, 2010
- Publisher
- CEPR discussion paper 7919
- Language
- English