Advanced Search
MyIDEAS: Login

Power-Biased Technological Change and the Rise in Earnings Inequality

Contents:

Author Info

  • Peter Skott

    () (University of Massachusetts Amherst)

  • Frederick Guy

    () (Birkbeck College)

Abstract

New information and communication technologies, we argue, have been 'power-biased': they have allowed firms to monitor low-skill workers more closely, thus reducing the power of these workers. An efficiency wage model shows that 'power-biased technical change' in this sense may generate rising wage inequality accompanied by an increase in both the effort and unemployment of low-skill workers. The skill-biased technological change hypothesis, on the other hand, offers no explanation for the observed increase in effort. JEL Categories: J31, O33

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.umass.edu/economics/publications/2005-17.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2005-17.

as in new window
Length:
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:ums:papers:2005-17

Contact details of provider:
Postal: Thompson Hall, Amherst, MA 01003
Phone: (413)545-2512
Fax: (413)545-2921
Email:
Web page: http://www.umass.edu/economics
More information through EDIRC

Related research

Keywords: power-biased technical change; skill bias; efficiency wages; wage inequality; work intensity;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Donald W. Katzner & Peter Skott, 2004. "Economic Explanation, Ordinality and the Adequacy of Analytic Specification," UMASS Amherst Economics Working Papers 2004-02, University of Massachusetts Amherst, Department of Economics.
  2. Berman, E. & Bound, J. & Machin, S., 1997. "Implications of Skill-Biased Technological Change: International Evidence," Papers 25, Centre for Economic Performance & Institute of Economics.
  3. Larry W. Hunter & John J. Lafkas, 2003. "Opening the box: Information technology, work practices, and wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(2), pages 224-243, January.
  4. Rosemary Batt, 2001. "Explaining wage inequality in telecommunications services: Customer segmentation, human resource practices, and union decline," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(2), pages 425-449, March.
  5. John E. DiNardo & Jorn-Steffen Pischke, 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," NBER Working Papers 5606, National Bureau of Economic Research, Inc.
  6. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
  7. Leamer, Edward E, 1996. "Wage Inequality from International Competition and Technological Change: Theory and Country Experience," American Economic Review, American Economic Association, vol. 86(2), pages 309-14, May.
  8. Dinardo, J. & Fortin, N.M. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Cahiers de recherche 9406, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  9. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
  10. Peter Skott, 2005. "Wage inequality and overeducation in a model with efficiency wages," UMASS Amherst Economics Working Papers 2005-06, University of Massachusetts Amherst, Department of Economics.
  11. Alfred D. Chandler, 1969. "Strategy and Structure: Chapters in the History of the American Industrial Enterprise," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530090.
  12. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
  13. Richard B. Freeman & Ronald Schettkat, 2000. "Skill Compression, Wage Differentials and Employment: Germany vs. the US," NBER Working Papers 7610, National Bureau of Economic Research, Inc.
  14. Timothy F. Bresnahan, 1997. "Computerization and Wage Dispersion: An Analytical Reinterpretation," Working Papers 97031, Stanford University, Department of Economics.
  15. Green, Francis & McIntosh, Steven, 2001. "The intensification of work in Europe," Labour Economics, Elsevier, vol. 8(2), pages 291-308, May.
  16. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
  17. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  18. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752, September.
  19. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  20. David Card & Francis Kramarz & Thomas Lemieux, 1995. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France," Working Papers 734, Princeton University, Department of Economics, Industrial Relations Section..
  21. Francis Green, 2002. "Why Has Work Effort Become More Intense?," Studies in Economics 0207, Department of Economics, University of Kent.
  22. Skott, Peter, 2005. "Fairness as a source of hysteresis in employment and relative wages," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 305-331, July.
  23. Francis Green, 2001. "It's Been A Hard Day's Night: The Concentration and Intensification of Work in Late Twentieth-Century Britain," British Journal of Industrial Relations, London School of Economics, vol. 39(1), pages 53-80, 03.
  24. Gintis, Herbert & Ishikawa, Tsuneo, 1987. "Wages, work intensity, and unemployment," Journal of the Japanese and International Economies, Elsevier, vol. 1(2), pages 195-228, June.
  25. Steve J. Davis & John Haltiwanger, 1991. "Wage Dispersion Between and Within U.S. Manufacturing Plants, 1963-1986," NBER Working Papers 3722, National Bureau of Economic Research, Inc.
  26. Michael J. Handel & Maury Gittleman, 2000. "Is there a Wage Payoff to Innovative Work Practices?," Macroeconomics 0004032, EconWPA.
  27. Nickell, Stephen & Bell, Brian, 1996. "Changes in the Distribution of Wages and Unemployment in OECD Countries," American Economic Review, American Economic Association, vol. 86(2), pages 302-08, May.
  28. Francis Green & Steven McIntosh, 1998. "Union power, cost of job loss, and workers' effort," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 363-383, April.
  29. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
  30. Entorf, Horst & Kramarz, Francis, 1997. "Does unmeasured ability explain the higher wages of new technology workers?," European Economic Review, Elsevier, vol. 41(8), pages 1489-1509, August.
  31. Peter Skott & Paul Auerbach, 2004. "Wage inequality and skill asymmetries," UMASS Amherst Economics Working Papers 2004-03, University of Massachusetts Amherst, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Is the graduate premium falling?
    by chris dillow in Stumbling and Mumbling on 2009-01-28 14:23:06
  2. Brown on skills
    by chris dillow in Stumbling and Mumbling on 2007-11-26 16:12:59
  3. The Chigley politics of the living wage
    by chris dillow in Stumbling and Mumbling on 2012-11-05 14:40:27
  4. Immigration: let's not be reasonable
    by chris dillow in Stumbling and Mumbling on 2012-11-02 14:40:42
  5. Divide-and-rule
    by chris dillow in Stumbling and Mumbling on 2012-12-17 14:45:31
  6. Class, power & ideology
    by chris dillow in Stumbling and Mumbling on 2011-06-12 11:33:52
  7. Inequality & power
    by chris dillow in Stumbling and Mumbling on 2011-05-20 17:33:31
  8. Class matters
    by chris dillow in Stumbling and Mumbling on 2011-05-18 12:43:32
  9. Looks & earnings
    by chris dillow in Stumbling and Mumbling on 2011-05-16 15:23:21
  10. Innovation & market failure
    by chris dillow in Stumbling and Mumbling on 2011-05-04 12:11:54
  11. Economists as priests?
    by chris dillow in Stumbling and Mumbling on 2010-11-15 14:31:22
  12. Profits & top incomes
    by chris dillow in Stumbling and Mumbling on 2010-10-31 09:47:10
  13. Miliband on immigration
    by chris dillow in Stumbling and Mumbling on 2010-09-29 13:05:08
  14. Brown's class fetishism
    by chris dillow in Stumbling and Mumbling on 2009-12-05 12:35:22
  15. Bonuses, power and inequality
    by chris dillow in Stumbling and Mumbling on 2009-02-08 11:15:00
  16. Technology and inequality
    by chris dillow in Stumbling and Mumbling on 2006-10-04 13:37:48
  17. Chris Dillow: The Importance of Class
    by Mark Thoma in Economist's View on 2011-06-12 18:07:00
  18. 754. notes June 12
    by admin in Reflections on Gardenworld Politics on 2011-06-14 17:35:47
  19. Debuncification
    by chris dillow in Stumbling and Mumbling on 2012-12-28 14:35:29
  20. Why is the middle squeezed?
    by chris dillow in Stumbling and Mumbling on 2013-03-27 14:18:02
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Peter Skott & Frederick Guy, 2007. "Power, productivity and profits," UMASS Amherst Economics Working Papers 2007-02, University of Massachusetts Amherst, Department of Economics.
  2. Skott, Peter & Guy, Frederick, 2007. "A model of power-biased technological change," Economics Letters, Elsevier, vol. 95(1), pages 124-131, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ums:papers:2005-17

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fidan Kurtulus).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.