IDEAS home Printed from https://ideas.repec.org/a/bla/scotjp/v71y2024i5p731-765.html

The AI revolution with 21st century skills: Implications for the wage inequality and technical change

Author

Listed:
  • Rachael Grant
  • Murat Üngör

Abstract

We construct a three‐level constant elasticity of substitution production model. Labour is split into three components: (i) low‐skilled labour, (ii) high‐skilled labour with a traditional education background, and (iii) high‐skilled labour with an AI‐based education background. Rising use of automation in production will cause a rise in the skill premium (wages of both types of high‐skilled workers relative to low‐skilled workers) and AI skill premium (wages of high‐skilled labour with an AI‐based education relative to those with a traditional education background). Dependent on the value of the elasticity, automation may favour high‐skilled workers with an AI‐based education background.

Suggested Citation

  • Rachael Grant & Murat Üngör, 2024. "The AI revolution with 21st century skills: Implications for the wage inequality and technical change," Scottish Journal of Political Economy, Scottish Economic Society, vol. 71(5), pages 731-765, November.
    • Handle: RePEc:bla:scotjp:v:71:y:2024:i:5:p:731-765
    DOI: 10.1111/sjpe.12395
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/sjpe.12395
    Download Restriction: no
    File URL: https://libkey.io/10.1111/sjpe.12395?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gersbach, Hans & Komarov, Evgenij & von Maydell, Richard, 2025. "Artificial intelligence as self-learning capital," Economic Modelling, Elsevier, vol. 153(C).
    2. Li, Hongyu & Lu, Zhiqiang & Zhang, Zhengping & Tanasescu, Cristina, 2025. "How does artificial intelligence affect manufacturing firms' energy intensity?," Energy Economics, Elsevier, vol. 141(C).
    3. Maydell, Richard & Firth, John, 2025. "Tilting the Race Between Humans and AI: The Role of Education and Unemployment Policies," VfS Annual Conference 2025 (Cologne): Revival of Industrial Policy 325460, Verein für Socialpolitik / German Economic Association.
    4. Minniti, Antonio & Prettner, Klaus & Venturini, Francesco, 2025. "AI innovation and the labor share in European regions," European Economic Review, Elsevier, vol. 177(C).
    5. Aísa, Rosa & Cabeza, Josefina, 2025. "Artificial intelligence: Redefining the retirement pattern," Research in Economics, Elsevier, vol. 79(3).
    6. Bloom, David E. & Prettner, Klaus & Saadaoui, Jamel & Veruete, Mario, 2025. "Artificial intelligence and the skill premium," Finance Research Letters, Elsevier, vol. 81(C).
    7. Yanne Gabriella Velomasy & Hongsheng Zhang & Laixun Zhao, 2026. "Imported Intermediate Digital Inputs and Income Inequality," Discussion Paper Series DP2026-01, Research Institute for Economics & Business Administration, Kobe University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:71:y:2024:i:5:p:731-765. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/sesssea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.