Coping with Technological Progress: the Role of Ability in Making Inequality so Persistent

Yona Rubinstein and Daniel Tsiddon ()

Working Papers from Tel Aviv

Abstract: This study explains the evolution of wage inequality over the last 30 years and supports this explanation with evidence. At each level of schooling, a faster rate of technological progress weakens the link between schooling and work and increases the unknown needed to cope with during one's working life. Coping with the unknown demands ability. By accentuating the role of ability, technological progress increases wage inequality within each group of education as well as between education groups. Inasmuch as education is an irreversible investment, the rise in within group inequality BOOSTS UP the rise of between group inequality. Guided by this theory we turn to the PSID for evidence.

Keywords: TECHNOLOGY; INEQUALITY; WAGES; ECONOMIC GROWTH; EDUCATION (search for similar items in EconPapers)
JEL-codes: D31 I21 J31 J62 O40 D63 (search for similar items in EconPapers)
Date: 1998
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Working Paper: Coping with Technological Progress: The Role of Ability in Making Inequality so Persistent (1999)
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