Job complexity and wage bargaining

Abstract

The objective of this paper is to qualify and discuss the effects of public policies according to bargaining solution used between workers and firms. We compare the effects of three solutions, Nash, Kalai-Smorod-insky and Equal-Sacrifice in a matching model where the job complexity is endogenous and workers are differentiated by their qualification level. We show that the choice of solution is extremely important since the effects of unemployment benefits on unemployment, labor market participation and on the job complexity can be completely opposite.

Keywords

• Bargaining
• Nash
• Kalai-Smorodinsky
• Equal-Sacrifice
• Complexity
• Unemployment benefits