Technology and Labor Regulations: Theory and Evidence
This paper shows that different labor market policies can lead to differences in technology across sectors in a model of labor saving technologies. Labor market regulations reduce the skill premium and as a result, if technologies are labor saving, countries with more stringent labor regulation, which are binding for low skilled workers, become less technologically advanced in their high-skilled sectors, and more technologically advanced in their low-skilled sectors. We then present data on capital output ratios, on estimated productivity levels and on patent creation, which support the predictions of our model.
Published Versions
Alberto Alesina & Michele Battisti & Joseph Zeira, 2018. "Technology and labor regulations: theory and evidence," Journal of Economic Growth, vol 23(1), pages 41-78. citation courtesy of 
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