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The Wider Impacts of High-Technology Employment: Evidence from U.S. Cities

Thomas Kemeny () and Taner Osman
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Taner Osman: University of California, Los Angeles

No 89, Working Papers from Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research

Abstract: Innovative, high-technology industries are commonly described as drivers of regional development. ‘Tech’ workers earn high wages, but they are also said to generate knock-on effects throughout the local economies that host them, spurring growth in jobs and wages in nontradable activities. At the same time, in iconic high-tech agglomerations like the San Francisco Bay Area, the home of Silicon Valley, the success of the tech industry creates tensions, in part as living costs rise beyond the reach of many non-tech workers. Across a large sample of U.S. cities, this paper explores these issues systematically. Combining annual data on wages, employment and prices from the Quarterly Census of Employment and Wages, the Department of Housing and Urban Development and the Consumer Price Index, it estimates how growth in tradable tech employment affects the real, living-cost deflated wages of local workers in nontradable sectors. Results indicate that high-technology employment has significant, positive, but modest effects on the real wages of workers in nontradable sectors. These effects appear to be spread consistently across different kinds of nontradable activities. In terms of substantive wider impacts, tech appears benign, though fairly ineffectual.

Keywords: high-technology, inequality, real wages, nontradable services; specialization, housing (search for similar items in EconPapers)
JEL-codes: E24 J21 J31 L86 O18 R11 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ict, nep-ino, nep-lma, nep-mac, nep-tid and nep-ure
Date: 2018-05
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