The influence of labour market institutions on job complexity

Abstract

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.