This paper presents a model with flexible wages in which unemployment of low-skilled labor is possible in equilibrium, whereas high-skilled workers are fully employed. Thus, the model can explain why even in countries with flexible labor markets and full employment of skilled labor an employment problem exists at the bottom of the skill spectrum. The model is used to evaluate the impact of technological change and increased skill supply on the employment of low-skilled workers. It is shown that a switch to technologies with higher skill requirements unambiguously leads to a rise in unemployment of low-skilled workers. An increase in the supply of high-skilled labor has a positive effect on the employment level of low-skilled labor.
Wie in allen hoch entwickelten Volkswirtschaften ist die Sicherung von Wohlstand und Lebensqualität in der Schweiz nur möglich, sofern die Unternehmen im globalen Innovationswettbewerb erfolgreich sind. Bildung, Forschung und Technologie kommt deshalb eine überragende Bedeutung zu. Ebenso wichtig sind die Wechselwirkungen an den Schnittstellen von Wissenschaft, Technik, Berufsbildung, Unternehmen und internationalen Netzwerken. Die Herausforderungen und Chancen des Innovationswettbewerbs betreffen nicht nur einige Pionierfirmen, sondern die Lebensumstände aller in der Schweiz lebenden und arbeitenden Menschen. Ziel der Innovationspolitik ist es, die Innovationsfähigkeit des gesamten Wirtschaftsstandorts Schweiz sicherzustellen beziehungsweise zu erhöhen.
This paper examines the distributional effects of international outsourcing in a two-sector, two-factor model. The analysis allows for switches between diversified and specialized equilibria. Also, equilibria in which only some firms of a sector outsource (incomplete or partial outsourcing) are considered. It is the interplay of the cost-saving and substitution effects of international outsourcing that determines the nature of the outsourcing equilibrium and its distributional consequences.
The present work focuses on the choice of the elicitation technique within a contingent valuation (CV) framework. We simultaneously apply three different elicitation techniques to elicit willingness-to-pay (WTP) values for three programs against Alzheimer's disease. First, the dichotomous choice approach is used, which is the standard procedure. However, giving respondents only a yes/no response alternative seems to result in overestimated WTP values. Therefore, we secondly apply the dissonance-minimizing format which screens respondents for their preferences and thus avoids possible yea-saying and protest answers against the payment vehicle. The third format, a modified version of the payment card, allows respondents to express a level of voting certainty and to make less of a commitment. With our findings we show that a well-designed CV method is a suitable instrument for helping decision makers in the health care sector and that the Swiss population favors highly a program which improves the situation of informal caregivers.
We present a new approach to endogenizing technological spillovers. Firms choose levels of a cost-reducing innovation from a continuum before they engage in competition for each other's R&D-employees. Successful bids for the competitor's employee then result in higher levels of cost reduction. Finally, firms enter product market competition. We apply the approach to the long-standing debate on the effects of the mode of competition on innovation incentives. We show that incentives to acquire spillovers are stronger and incentives to prevent spillovers are weaker under quantity competition than under price competition. As a result, for a wide range of parameters, price competition gives stronger innovation incentives than quantity competition.
We develop a new approach to endogenizing technological spillovers. We analyze a game in which firms can first invest in cost-reducing R&D, then compete on the human-capital market for their knowledge-bearing employees, and finally enter the product market. If R&D employees change firms, spillovers arise. We show that technological spillovers are most likely when they increase total industry profits. We use this result to show that innovation incentives are usually stronger for endogenous than for exogenous spillovers and that endogenous spillovers may reverse the result that innovation incentives are stronger under quantity competition than under price competition. Finally, we explore the robustness of our results with respect to contractual incompleteness and the number of R&D workers.
We analyze a model of oligopolistic competition with ongoing investment. Special cases include incremental investment, patent races, learning by doing, and network externalities. We investigate circumstances under which a firm with low costs or high quality will extend its initial lead through investments. To this end, we derive a new comparative statics result for general games with strategic substitutes, which applies to our investment game. Finally, we highlight plausible countervailing effects that arise when investments of leaders are less effective than those of laggards, or in dynamic games when firms are sufficiently patient.
This paper develops a two-sector general-equilibrium model in which firms in the primary economy have to create workplaces prior to production and product market competition. For this, we introduce the endogenous sunk-cost approach with two-stage decisions of firms from IO in the macro labor literature. By hypothesizing that technological change has lowered marginal costs but has raised nonproduction requirements for providing workplaces, we are able to explain downsizing of low-skilled jobs in the primary economy despite wage flexibility exante. This leads to more accentuated labor-market segmentation, i.e., an increase in wage pressure in the secondary economy.
