Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20295 
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion Papers No. 1060
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper studies how changes in the complexity of the firms' production technologies affect wage differences between and within tasks. In a production process where tasks are complementary, the employer may have an incentive to pay higher wages when using more complex technologies because the output of such processes is more effort-sensitive. We use linked employer-employee data from the Finnish metal industry. These data provide quantified information on the complexity of the tasks of individual workers. The average complexity of the tasks in the firm is used as a proxy for the complexity of the production process. We estimate the effect of the complexity of the production process on hourly wages at different levels of complexity of the worker's own tasks and at different parts of the conditional wage distribution within tasks. We find that the complexity of the firm's production process increases wages in all the tasks but that there are no significant differences in this effect across tasks. Finally, the effect of the complexity of the production process tends to be stronger at the high end of the conditional wage distribution within tasks.
Subjects: 
technological complexity
wage inequality
JEL: 
O33
J31
Document Type: 
Working Paper

Files in This Item:
File
Size
862.9 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.