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Automation, globalisation and relative wages: An empirical analysis of winners and losers

Antonio Francesco Gravina () and Neil Foster-McGregor ()
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Antonio Francesco Gravina: Department of Law, University of Palermo, Italy and Department of Economics, University of Messina, Italy

No 2020-040, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: In this paper, we study the effects of advances in robotics, tangible and intangible technologies, and trade openness and global value chain participation on relative wages, relying upon the skill-biased technical change and polarisation of the labour force frameworks. The empirical analysis is carried out using a panel dataset comprising 18 mostly advanced European economies and 6 industries, with annual observations spanning the period 2008-2017. Our findings suggest that intangible technologies - especially software & databases - significantly increase the wage premium for high relative to lower-skilled labour. Additionally, the tangible component of ICT primarily benefits lower-skilled workers, whereas R&D and trade openness produce polarising effects. The results are robust to the inclusion of sector-specific labour market regulations variables in the models.

Keywords: Robots; Intangibles; Automation; ICT; Globalisation; Wage Differentials (search for similar items in EconPapers)
JEL-codes: C01 F16 F63 J31 O11 O33 O43 (search for similar items in EconPapers)
Date: 2020-09-03
New Economics Papers: this item is included in nep-ict, nep-int, nep-lma and nep-tid
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