Power-Biased Technological Change and the Rise in Earnings Inequality
Peter Skott () and
Frederick Guy ()
UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics
New information and communication technologies, we argue, have been 'power-biased': they have allowed firms to monitor low-skill workers more closely, thus reducing the power of these workers. An efficiency wage model shows that 'power-biased technical change' in this sense may generate rising wage inequality accompanied by an increase in both the effort and unemployment of low-skill workers. The skill-biased technological change hypothesis, on the other hand, offers no explanation for the observed increase in effort. JEL Categories: J31, O33
Keywords: power-biased technical change; skill bias; efficiency wages; wage inequality; work intensity (search for similar items in EconPapers)
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Working Paper: Power-Biased Technological Change and the Rise in Earnings Inequality (2005)
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