Technological knowledge and wages: from skill premium to wage polarization

• Type: Article in International Scientific Journal
• Date: 2023

Authors

Óscar Afonso (Author) FEP; Sequeira, T (Author) Other; Almeida, D (Author) Other

Journal

Title: Journal of Economics/ Zeitschrift fur Nationalokonomie

Vol. 40 No. 2

Pages: 93 - 119

ISSN: 0931-8658

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 2 Citations

Scopus - 2 Citations

Other information

Authenticus ID: P-00Y-QZN

DOI: 10.1007/s00712-023-00833-y

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