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Wage Inequality and the Changing Organization of Work

  • Görlich, Dennis
  • Snower, Dennis J.

This paper sheds light on how changes in the organization of work lead to wage inequality. We present a theoretical model in which workers with a wider span of competence (higher level of multitasking) earn a wage premium. Since abilities and opportunities to expand the span of competence are distributed unequally among workers across and within education groups, our theory explains (1) rising wage inequality between groups, (2) rising wage inequality within groups, and (3) the polarization of work and the decoupling of the income distribution. Using a rich German data set covering a 20-year period from 1986 to 2006, we provide empirical support for our model.

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File URL: http://econstor.eu/bitstream/10419/37299/1/VfS_2010_pid_322.pdf
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Paper provided by Kiel Institute for the World Economy (IfW) in its series Open Access Publications from Kiel Institute for the World Economy with number 37299.

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Date of creation: 2010
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Handle: RePEc:zbw:ifwkie:37299
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  1. Gathmann, Christina & Schönberg, Uta, 2007. "How General Is Human Capital? A Task-Based Approach," IZA Discussion Papers 3067, Institute for the Study of Labor (IZA).
  2. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  3. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
  4. Jörn-Steffen Pischke, 2007. "The Impact of Length of the School Year on Student Performance and Earnings: Evidence From the German Short School Years," Economic Journal, Royal Economic Society, vol. 117(523), pages 1216-1242, October.
  5. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
  6. Haskel, Jonathan & Slaughter, Matthew J, 2001. "Trade, Technology and U.K. Wage Inequality," Economic Journal, Royal Economic Society, vol. 111(468), pages 163-87, January.
  7. John E. DiNardo & Jorn-Steffen Pischke, 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," NBER Working Papers 5606, National Bureau of Economic Research, Inc.
  8. Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2013. "Offshoring and the onshore composition of tasks and skills," Journal of International Economics, Elsevier, vol. 90(1), pages 91-106.
  9. Dieter Von fintel, 2007. "Dealing With Earnings Bracket Responses In Household Surveys - How Sharp Are Midpoint Imputations?," South African Journal of Economics, Economic Society of South Africa, vol. 75(2), pages 293-312, 06.
  10. Dennis J. Snower & Alessio J. G. Brown & Christian Merkl, 2009. "Globalization and the Welfare State: A Review of Hans-Werner Sinn's Can Germany Be Saved?," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 136-58, March.
  11. Van Reenen, John & Caroli, Eve, 2001. "Skill-Biased Organizational Change? Evidence from a panel of British and French establishments," Economics Papers from University Paris Dauphine 123456789/10093, Paris Dauphine University.
  12. Aghion, Philippe & Howitt, Peter & Violante†, Giovanni L., 2002. "General Purpose Technology and Wage Inequality," Scholarly Articles 12490369, Harvard University Department of Economics.
  13. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA).
  14. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
  15. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 353-76, July.
  16. Bauer, Thomas & Bender, Stefan, 2002. "Technological Change, Organizational Change, and Job Turnover," CEPR Discussion Papers 3534, C.E.P.R. Discussion Papers.
  17. Ann Bartel & Casey Ichniowski & Kathryn Shaw, 2007. "How Does Information Technology Affect Productivity? Plant-Level Comparisons of Product Innovation, Process Improvement, and Worker Skills," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1721-1758, November.
  18. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
  19. Francine D. Blau & Lawrence Kahn, 2004. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," CESifo Working Paper Series 1139, CESifo Group Munich.
  20. Gould, Eric D., 2005. "Inequality and ability," Labour Economics, Elsevier, vol. 12(2), pages 169-189, April.
  21. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  22. 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.
  23. Paul Osterman, 2000. "Work reorganization in an era of restructuring: Trends in diffusion and effects on employee welfare," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 179-196, January.
  24. 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.
  25. Claudia Goldin & Lawrence F. Katz, 2007. "Long-Run Changes in the U.S. Wage Structure: Narrowing, Widening, Polarizing," NBER Working Papers 13568, National Bureau of Economic Research, Inc.
  26. Lindbeck, Assar & Snower, Dennis J., 1997. "Reorganization of Firms and Labor Market Inequality," Seminar Papers 605, Stockholm University, Institute for International Economic Studies.
  27. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  28. Aghion, Philippe & Howitt, Peter & Violante, Giovanni L, 2002. " General Purpose Technology and Wage Inequality," Journal of Economic Growth, Springer, vol. 7(4), pages 315-45, December.
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