IDEAS home Printed from https://ideas.repec.org/a/prg/jnlaop/v2018y2018i1id596p47-66.html
   My bibliography  Save this article

The Role of Technological Change in Income Inequality in the United States

Author

Listed:
  • Elena Deskoska
  • Jana Vlčková

Abstract

This paper examines the impact of the technological change on income inequality in the United States of America. This is done by integrating theoretical and analytical findings of the channels through which technological change affects income inequality. The research is based on century-long income inequality data sets, although it prioritises the study of income inequality between the 1970s and the 2010s. The two major causes of rising income inequality have been technological change and globalisation. The paper also accounts for the other inequality triggers that have resulted from the political and economic structure of the country. The spread of automatisation and computerisation and of other changes associated with The Fourth Industrial Revolution are likely to reinforce skill-biased technological change. Therefore, new measures addressing income inequality, such as Universal Basic Income, are discussed.

Suggested Citation

  • Elena Deskoska & Jana Vlčková, 2018. "The Role of Technological Change in Income Inequality in the United States," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2018(1), pages 47-66.
  • Handle: RePEc:prg:jnlaop:v:2018:y:2018:i:1:id:596:p:47-66
    DOI: 10.18267/j.aop.596
    as

    Download full text from publisher

    File URL: http://aop.vse.cz/doi/10.18267/j.aop.596.html
    Download Restriction: free of charge

    File URL: http://aop.vse.cz/doi/10.18267/j.aop.596.pdf
    Download Restriction: free of charge

    File URL: https://libkey.io/10.18267/j.aop.596?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
    2. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    5. Avraham Ebenstein & Ann Harrison & Margaret McMillan & Shannon Phillips, 2022. "Estimating The Impact Of Trade And Offshoring On American Workers Using The Current Population Surveys," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 12, pages 275-289, World Scientific Publishing Co. Pte. Ltd..
    6. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
    7. Haskel, Jonathan E. & Slaughter, Matthew J., 2002. "Does the sector bias of skill-biased technical change explain changing skill premia?," European Economic Review, Elsevier, vol. 46(10), pages 1757-1783, December.
    8. Hongyi Li & Heng‐fu Zou, 1998. "Income Inequality is not Harmful for Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 318-334, October.
    9. Pablo D. Fajgelbaum & Amit K. Khandelwal, 2016. "Measuring the Unequal Gains from Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(3), pages 1113-1180.
    10. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    11. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1, October.
    12. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    13. Robert Z. Lawrence & Matthew J. Slaughter, 1993. "International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2 Microec), pages 161-226.
    14. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Chapters, in: Resource and Output Trends in the United States since 1870, pages 1-23, National Bureau of Economic Research, Inc.
    15. Joseph E. Stiglitz, 2015. "The Origins of Inequality, and Policies to Contain It," National Tax Journal, National Tax Association;National Tax Journal, vol. 68(2), pages 425-448, June.
    16. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
    17. Lawrence Mishel & Kar-Fai Gee, 2012. "Why Aren’t Workers Benefiting from Labour Productivity Growth in the United States?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 23, pages 31-43, Spring.
    18. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    19. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    20. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
    21. repec:bla:rdevec:v:2:y:1998:i:3:p:318-34 is not listed on IDEAS
    22. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
    23. Thomas Kemeny & David Rigby, 2012. "Trading away what kind of jobs? Globalization, trade and tasks in the US economy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 1-16, April.
    24. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Cavenaile, Laurent, 2021. "Offshoring, computerization, labor market polarization and top income inequality," Journal of Macroeconomics, Elsevier, vol. 69(C).
    3. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    4. Harashima, Taiji, 2023. "Secular Increase in Economic Inequality Accompanying a Constant Output/Capital Ratio," MPRA Paper 117705, University Library of Munich, Germany.
    5. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    6. Jonathan Fisher & David S. Johnson & Timothy M. Smeeding, 2015. "Inequality of Income and Consumption in the U.S.: Measuring the Trends in Inequality from 1984 to 2011 for the Same Individuals," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 630-650, December.
    7. Holger M. Mueller & Paige P. Ouimet & Elena Simintzi, 2015. "Wage Inequality and Firm Growth," LIS Working papers 632, LIS Cross-National Data Center in Luxembourg.
    8. Naude, Wim & Nagler, Paula, 2015. "Industrialisation, Innovation, Inclusion," MERIT Working Papers 2015-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Leonard Kukić, 2021. "The Nature Of Technological Failure: Patterns Of Biased Technical Change In Socialist Europe," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 895-925, July.
    10. Philip Armour & Richard V. Burkhauser & Jeff Larrimore, 2014. "Levels and Trends in U.S. Income and its Distribution: A Crosswalk from Market Income towards a Comprehensive Haig‐Simons Income Approach," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 271-293, October.
    11. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    12. Thomas Kemeny & David Rigby, 2012. "Trading away what kind of jobs? Globalization, trade and tasks in the US economy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 1-16, April.
    13. repec:eee:labchp:v:3:y:1999:i:pb:p:2215-2288 is not listed on IDEAS
    14. Lisandro Abrego & John Whalley, 1999. "The Choice of Structural Model in Trade-Wages Decompositions," CSGR Working papers series 34/99, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
    15. Harashima, Taiji, 2019. "Preventing Widening Inequality: Economic Rents and Sustainable Heterogeneity," MPRA Paper 95727, University Library of Munich, Germany.
    16. Richard V. Burkhauser & Jeff Larrimore & Sean Lyons, 2017. "Measuring Health Insurance Benefits: The Case Of People With Disabilities," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 439-456, July.
    17. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    18. Van Reenen, John, 2011. "Wage inequality, technology and trade: 21st century evidence," Labour Economics, Elsevier, vol. 18(6), pages 730-741.
    19. Jenny Gordon, 2016. "Australia's Productivity: Some Insights from Productivity Analysis," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 173-186, May.
    20. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    21. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC Working Papers on Digital Economy 2013-07, Joint Research Centre.

    More about this item

    Keywords

    income inequality; technological change; fourth industrial revolution; USA; globalisation;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

    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:prg:jnlaop:v:2018:y:2018:i:1:id:596:p:47-66. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.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.