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Discussion Paper Details

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Title: Employment protection versus flexicurity: on technology adoption in unionised firms

Author(s): Kjell Erik Lommerud and Odd Rune Straume

Publication Date: July 2010

Keyword(s): Employment protection, Flexicurity, Technology adoption and Trade unions

Programme Area(s): Labour Economics and Public Economics

Abstract: 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.

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Bibliographic Reference

Lommerud, K and Straume, O. 2010. 'Employment protection versus flexicurity: on technology adoption in unionised firms'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7919