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Spatial Wage Inequality and Technological Change

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  • Charlotte Senftleben-Koenig
  • Hanna Wielandt

Abstract

During the last decades, wage inequality in Germany has considerably increased both within and across regions. Building on concepts of the task-based approach, this paper studies whether and to what extent these developments are driven by technological change. We present novel evidence that technological change is positively related to intra-regional wage inequality. This is driven by increases in the compensation for non-routine cognitive tasks that are prevalent at upper percentiles of the wage distribution combined with decreases in the compensation for non-routine manual tasks, which are located at lower percentiles. Because there exists substantial variation in the degree of technology exposure across German regions, technological change can also explain part of the rise in inter-regional wage inequality.

Suggested Citation

  • Charlotte Senftleben-Koenig & Hanna Wielandt, 2014. "Spatial Wage Inequality and Technological Change," SFB 649 Discussion Papers SFB649DP2014-038, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    • Handle: RePEc:hum:wpaper:sfb649dp2014-038
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    Cited by:

    1. Dauth, Wolfgang, 2014. "Job polarization on local labor markets," IAB-Discussion Paper 201418, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Marina Malkina, 2019. "Spatial wage inequality and its sectoral determinants: the case of modern Russia," Oeconomia Copernicana, Institute of Economic Research, vol. 10(1), pages 69-87, March.
    3. Jasmine Mondolo, 2022. "The composite link between technological change and employment: A survey of the literature," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1027-1068, September.
    4. Eichhorst, Werner & Arni, Patrick & Buhlmann, Florian & Isphording, Ingo E. & Tobsch, Verena, 2015. "Wandel der Beschäftigung: Polarisierungstendenzen auf dem deutschen Arbeitsmarkt," IZA Research Reports 68, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Spatial Changes; Wage Inequality; Job Tasks; Technological Change;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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