Do low-skilled workers gain from high-tech employment growth? High-technology multipliers, employment and wages in Britain

Neil Lee and Stephen Clarke

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Do low-skilled workers benefit from the growth of high-technology industries in their local economy? Policymakers invest considerable resources in attracting and developing innovative, high-tech industries, but there is relatively little evidence on the distribution of the benefits. This paper investigates the labour market impact of high-tech growth on low and mid-skilled workers, using data on UK local labour markets from 2009-2015. It shows that high-tech industries – either STEM-intensive ‘high-tech’ or digital economy – have a positive jobs multiplier, with each 10 new high-tech jobs creating around 7 local non-tradeable service jobs, around 6 of which go to low-skilled workers. Employment rates for mid-skilled workers do not increase, but they benefit from higher wages. Yet while low-skilled workers gain from higher employment rates, the jobs are often poorly paid service work, so average wages fall, particularly when increased housing costs are considered.

Keywords: wages; labour markets; multipliers; high-technology; cities; Inequality; UKRI fund (search for similar items in EconPapers)
JEL-codes: E24 J21 J31 L86 O18 R11 R31 (search for similar items in EconPapers)
Date: 2019-11-01
New Economics Papers: this item is included in nep-eur, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

Published in Research Policy, 1, November, 2019, 48(9). ISSN: 0048-7333

Downloads: (external link)
http://eprints.lse.ac.uk/100926/ Open access version. (application/pdf)

Related works:
Journal Article: Do low-skilled workers gain from high-tech employment growth? High-technology multipliers, employment and wages in Britain (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100926

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().