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Technological knowledge and wages: from skill premium to wage polarization

Title
Technological knowledge and wages: from skill premium to wage polarization
Type
Article in International Scientific Journal
Year
2023
Authors
Óscar Afonso
(Author)
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Sequeira, T
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Almeida, D
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Journal
Vol. 40 No. 2
Pages: 93 - 119
ISSN: 0931-8658
Publisher: Springer Nature
Other information
Authenticus ID: P-00Y-QZN
Abstract (EN): This paper studies the impact of automation shocks on the technological-knowledge level, skill premium (or wage inequality), real prices, output, and economic growth. To highlight the economic mechanisms, we devise a task-based direct technical change model that allows us to analyze the determinants of the threshold task, the relative output and prices between sectors, intra- and inter-sectoral wage differences, wage polarization and economic growth rates. We observe that an increase in the efficiency of skilled or unskilled workers as well as a decrease in the efficiency of medium-skilled workers as possible result of automation always increase wage polarization as well as economic growth rates. In a quantitative exercise we also assess the change in the weight of routine and non-routine sectors in the economy. In this context, governments should implement policies to support the professional transition of medium-skilled workers to non-routinazable tasks.
Language: English
Type (Professor's evaluation): Scientific
No. of pages: 27
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