The influence of labour market institutions on job complexity

This article aims to understand how public policies affect the behavior of agents in terms of selectivity. In other words, we explain how the state of the labour market and, in particular the qualification level of workers, affects the technological choices of firms. Using a matching model in which workers are vertically differentiated and where the nature of jobs is endogenous, we show that an increase in unemployment benefits or in minimum wage can enhance the recruiting of skilled workers by making firms more selective and jobs more complex.

Research highlights► Matching model, workers are vertically differentiated and complexity is endogenous. ► Workers productivity depends both on their qualification level and on job complexity. ► Effects of unemployment benefits and minimum wage on labour market participation. ► Increase in minimum wage makes agents more selective and jobs more complex.