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Wage Inequality and the Changing Organization of Work

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  • Görlich, Dennis
  • Snower, Dennis J.

Abstract

This paper sheds light on how changes in the organization of work lead to wage inequality. We present a theoretical model in which workers with a wider span of competence (higher level of multitasking) earn a wage premium. Since abilities and opportunities to expand the span of competence are distributed unequally among workers across and within education groups, our theory explains (1) rising wage inequality between groups, (2) rising wage inequality within groups, and (3) the polarization of work and the decoupling of the income distribution. Using a rich German data set covering a 20-year period from 1986 to 2006, we provide empirical support for our model. --

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Paper provided by Kiel Institute for the World Economy (IfW) in its series Open Access Publications from Kiel Institute for the World Economy with number 37299.

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Date of creation: 2010
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Handle: RePEc:zbw:ifwkie:37299

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  1. Caroli, Eve & Van Reenen, John, 1999. "Skill biased organizational change? Evidence from a panel of British and French establishments," CEPREMAP Working Papers (Couverture Orange) 9917, CEPREMAP.
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  4. 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, MIT Press, vol. 117(1), pages 339-376, February.
  5. DiNardo, John E & Pischke, Jorn-Steffen, 1997. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 291-303, February.
  6. Aghion, Philippe & Howitt, Peter & Violante, Giovanni L, 2002. " General Purpose Technology and Wage Inequality," Journal of Economic Growth, Springer, Springer, vol. 7(4), pages 315-45, December.
  7. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(2), pages 235-270, April.
  8. Pischke, Jörn-Steffen, 2003. "The Impact of Length of the School Year on Student Performance and Earnings: Evidence from the German Short School Years," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4074, C.E.P.R. Discussion Papers.
  9. Ann Bartel & Casey Ichniowski & Kathryn Shaw, 2007. "How Does Information Technology Affect Productivity? Plant-Level Comparisons of Product Innovation, Process Improvement, and Worker Skills," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 122(4), pages 1721-1758, November.
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  13. Haskel, Jonathan & Slaughter, Matthew, 1999. "Trade, Technology and UK Wage Inequality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2091, C.E.P.R. Discussion Papers.
  14. Lindbeck, Assar & Snower, Dennis J., 1996. "Reorganization of Firms and Labour Market Inequality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1375, C.E.P.R. Discussion Papers.
  15. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  16. Dieter Von fintel, 2007. "Dealing With Earnings Bracket Responses In Household Surveys - How Sharp Are Midpoint Imputations?," South African Journal of Economics, Economic Society of South Africa, Economic Society of South Africa, vol. 75(2), pages 293-312, 06.
  17. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA).
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  19. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  20. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
  21. Paul Osterman, 2000. "Work reorganization in an era of restructuring: Trends in diffusion and effects on employee welfare," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 179-196, January.
  22. Gathmann, Christina & Schönberg, Uta, 2007. "How General Is Human Capital? A Task-Based Approach," IZA Discussion Papers 3067, Institute for the Study of Labor (IZA).
  23. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(3), pages 353-76, July.
  24. Claudia Goldin & Lawrence F. Katz, 2007. "Long-Run Changes in the U.S. Wage Structure: Narrowing, Widening, Polarizing," NBER Working Papers 13568, National Bureau of Economic Research, Inc.
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  26. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
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  28. Aghion, Philippe & Howitt, Peter & Violante†, Giovanni L., 2002. "General Purpose Technology and Wage Inequality," Scholarly Articles 12490369, Harvard University Department of Economics.
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Cited by:
  1. Kohei Daido & Ken Tabata, 2012. "Skill-Biased Technological Change, Organizational Change, and Wage Inequality," Discussion Paper Series, School of Economics, Kwansei Gakuin University 84, School of Economics, Kwansei Gakuin University, revised Feb 2012.

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