R&D and the Demand for Skilled and Unskilled Labor
نویسندگان
چکیده
This paper analyzes the impact of the skill composition of the working labor force on the innovative activity of firms when there is both an imperfect labor market and monopolistic competition on the product market. The labor market imperfections arise through a kind of insider outsider mechanism where in the bargaining round the union attaches a greater weight to the wage and employment interests of the low skilled workers. The effects of the bargaining policy are taken into account in the R&D decisions of the firms which are modelled within a single static framework generating structural equations for product innovation and process innovation R&D intensities. We estimate the model using a cross-section of 462 West-German manufacturing firms from the Mannheim Innovation Panel. The effect of R&D spillovers is estimated by spatial autoregressive model that is defined over a technology space. JEL-Classification: C31, L13, O31, O33
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