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A Cautionary Tale For Digital Age Transitioning: The Impeding Polarization Effects

Author

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  • Raluca Ioana IORGULESCU

    (Institute for Economic Forecasting-NIER, Romanian Academy, Bucharest)

  • John M. POLIMENI

    (Albany College of Pharmacy and Health Sciences, USA)

Abstract

Jobs are susceptible to computerization depending on the tasks involved. The existing literature documents the impact of computerization on labor market outcomes in highly developed countries and it also raises awareness about the future of IT-saturated societies based on the experience of advanced countries. In 1966, Michael Polanyi observed that “We can know more than we can tell... The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar...” and almost fifty years later David Autor explains how the IT revolution is a cause for an accelerated labor market polarization (a simultaneous increase of jobs requiring high-education and offering a high wage and of jobs requiring low-education and paying a low-wage) as an expression of Polanyi’s paradox. This paper will present, assuming an intensifying IT revolution globally, an overview of the concepts and the empirical results that warn about the possibility that an IT-bounded Romanian labor market where Polanyi’s paradox and the productivity paradox are at work could increase inequality through digital divide, job polarization and wage polarization.

Suggested Citation

  • Raluca Ioana IORGULESCU & John M. POLIMENI, 2016. "A Cautionary Tale For Digital Age Transitioning: The Impeding Polarization Effects," Romanian Economic Business Review, Romanian-American University, vol. 11(2), pages 145-153, June.
    • Handle: RePEc:rau:journl:v:11:y:2016:i:2:p:145-153
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    References listed on IDEAS

    as
    1. 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.
    2. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    3. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2014. "Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing," American Economic Review, American Economic Association, vol. 104(5), pages 394-399, May.
    4. Chuan Sun & Hao Jiao & Yun Ren, 2014. "Regional Informatization and Economic Growth in Japan: An Empirical Study Based on Spatial Econometric Analysis," Sustainability, MDPI, vol. 6(10), pages 1-21, October.
    5. Liu, Ting-Kun & Chen, Jong-Rong & Huang, Cliff J. & Yang, Chih-Hai, 2014. "Revisiting the productivity paradox: A semiparametric smooth coefficient approach based on evidence from Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 300-308.
    6. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    7. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    8. David Autor, 2014. "Polanyi's Paradox and the Shape of Employment Growth," NBER Working Papers 20485, National Bureau of Economic Research, Inc.
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