Template-type: ReDIF-Paper 1.0
AAuthor-Name: Dughera, Stefano    
Author-Email: s.dughera@unito.it
Author-Name: Quatraro, Francesco 
Author-Email: francesco.quatraro@unito.it
Author-Name: Vittori, Claudia
Author-Email: claudia.vittori@gmail.com
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Innovation, on-the-Job Learning, and Labor Contracts: An Organizational Equilibria Approach.
Abstract: An established tenet of the literature is that the use of flexible labor tends to lead to less innovation. 
Yet, less attention has been paid to the possibility that it is the decision to innovate that conversely generates the incentive to hire on a permanent basis. The main goal of this paper is to show the existence of interlocking complementarities between the firm’s technological and employment strategies. 
To do so, we develop a simple model where the workers’ decision to invest in human capital is affected by the type of employment contract (temporary vs permanent) and by the type of technological investments (routine vs innovative). 
When the firm is unable to coordinate its actions across these different domains, two equilibria simultaneously exist: in the “high-road” equilibrium, firms invest more in innovative projects and hire on a permanent basis; in the “low-road” equilibrium, they invest more in routine projects and hire on a temporary basis.
Length: pages 30
Creation-Date: 2021-02
File-URL: https://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2021dip/wp_01_2021.pdf
File-Format: Application/PDF
Handle: RePEc:uto:labeco:202101