Technological progress and inequality: an ambiguous relationship

Maurizio Iacopetta ()

A chapter in Schumpeterian Perspectives on Innovation, Competition and Growth, 2009, pp 181-201 from Springer

Abstract: Abstract Faster technological change does not necessarily widen wage inequality. This occurs only if technical progress takes the form of product improvements. Conversely, cost-reducing innovation favors a reduction in inequality. This novel result is obtained in a theoretical framework in which individuals can choose both the quality of the equipment and the retooling time. The main implication of this work is that the rapid decline of the durable goods’ price documented in the postwar period, and especially since the 1970s, should have favored areductionin income inequality. The popular view that attributes the rise in inequality to the spread of information technologies is questioned by this analysis.

Keywords: Inequality; Product innovation; Process innovation (search for similar items in EconPapers)
JEL-codes: O15 O33 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/978-3-540-93777-7_11

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