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The Wider Impacts of High-Technology Employment: Evidence from U.S. Cities

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  • Thomas Kemeny

    (Queen Mary, University of London)

  • Taner Osman

    (University of California, Los Angeles)

Abstract

Innovative, high-technology industries are commonly described as drivers of regional development. ‘Tech’ workers earn high wages, but they are also said to generate knock-on effects throughout the local economies that host them, spurring growth in jobs and wages in nontradable activities. At the same time, in iconic high-tech agglomerations like the San Francisco Bay Area, the home of Silicon Valley, the success of the tech industry creates tensions, in part as living costs rise beyond the reach of many non-tech workers. Across a large sample of U.S. cities, this paper explores these issues systematically. Combining annual data on wages, employment and prices from the Quarterly Census of Employment and Wages, the Department of Housing and Urban Development and the Consumer Price Index, it estimates how growth in tradable tech employment affects the real, living-cost deflated wages of local workers in nontradable sectors. Results indicate that high-technology employment has significant, positive, but modest effects on the real wages of workers in nontradable sectors. These effects appear to be spread consistently across different kinds of nontradable activities. In terms of substantive wider impacts, tech appears benign, though fairly ineffectual.

Suggested Citation

  • Thomas Kemeny & Taner Osman, 2018. "The Wider Impacts of High-Technology Employment: Evidence from U.S. Cities," Working Papers 89, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:89
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    Cited by:

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    7. Li, Shiyuan & Li, Yumin, 2021. "The Impact of Mobile Phone Adoption on Income Inequality," MPRA Paper 110969, University Library of Munich, Germany.
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    9. Katherine Parsons & Rick Delbridge & Elvira Uyarra & David Waite & Robert Huggins & Kevin Morgan, 2024. "Advancing inclusive innovation policy in the UK’s second-tier city-regions," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 44(3), pages 313-336, September.
    10. Doris Kwon & Olav Sorenson, 2023. "The Silicon Valley Syndrome," Entrepreneurship Theory and Practice, , vol. 47(2), pages 344-368, March.
    11. Jiaxin Wu & Hongjuan Yang & Tanveer Ahmed, 2023. "An assessment of the policy of poverty alleviation in continuous poverty-stricken areas: evidence from Yunnan Province, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9757-9777, September.
    12. Kemeny, Tom & Storper, Michael, 2022. "The changing shape of spatial inequality in the United States," SocArXiv wnd8t, Center for Open Science.
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    15. von Borries, Alvaro & Grillitsch, Markus & Lundquist, Karl-Johan, 2022. "Geographies of Low-Income Jobs: The concentration of low-income jobs, the knowledge economy and labor market polarization in Sweden, 1990-2018," Papers in Innovation Studies 2022/4, Lund University, CIRCLE - Centre for Innovation Research.
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    More about this item

    Keywords

    high-technology; inequality; real wages; nontradable services; specialization; housing;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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