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Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities


  • Lee, Neil
  • Rodríguez-Pose, Andrés


High-technology industries are seen as important in helping urban economies thrive, but at the same time they are often considered as potential drivers of relative poverty and social exclusion. However, little research has assessed how high-tech affects urban poverty and the wages of workers at the bottom of the pyramid. This paper addresses this gap in the literature and investigates the relationship between employment in high-tech industries, poverty and the labor market for non-degree educated workers using a panel of 295 Metropolitan Statistical Areas (MSAs) in the United States between 2005 and 2011. The results of the analysis show no real impact of the presence of high-technology industries on poverty and, especially, extreme poverty. Yet there is strong evidence that tech-employment increases wages for non-degree educated workers and, to a lesser extent, employment for those without degrees. These results suggest that while tech employment has some role in improving welfare for non-degree educated workers, tech-employment alone is not enough to reduce poverty.

Suggested Citation

  • Lee, Neil & Rodríguez-Pose, Andrés, 2016. "Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities," CEPR Discussion Papers 11341, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11341

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    References listed on IDEAS

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    Cited by:

    1. Neil Lee & Stephen Clarke, 2017. "Who gains from high-tech growth? High-technology multipliers, employment and wages in Britain," SPRU Working Paper Series 2017-14, SPRU - Science and Technology Policy Research, University of Sussex.
    2. Stephan Brunow & Antonia Birkeneder & Andrés Rodríguez-Pose, 2018. "Creative and science-oriented employees and firm-level innovation," Papers in Evolutionary Economic Geography (PEEG) 1808, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2018.
    3. Brunow, Stephan & Birkeneder, Antonia & Rodriguez-Pose, Andrés, 2017. "Creative and science oriented employees and firm innovation : a key for smarter cities?," IAB Discussion Paper 201724, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item


    cities; employment; High-technology industries; poverty; wages;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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