Related papers: Income Inequality, Cause and Cure
Although wage inequality has evolved in advanced countries over recent decades, it remains unknown the extent to which changes in wage inequality and their differences across countries are attributable to specific capital and labor…
This study examines the relationship between automation and income inequality across different countries, taking into account the varying levels of technological adoption and labor market institutions. The research employs a panel data…
A central socioeconomic concern about Artificial Intelligence is that it will lower wages by depressing the labor share - the fraction of economic output paid to labor. We show that declining labor share is more likely to raise wages. In a…
Technological change is responsible for major changes in the labor market. One of the offspring of technological change is the SBTC, which is for many economists the leading cause of the increasing wage inequality. However, despite that the…
We study the conditions under which technological advances, in combination with a lognormal wage distribution, incentivize agents into an inefficient educational arms race. Our model emphasizes that lognormal wage distributions imply that…
An increasingly large number of experiments study the labor productivity effects of automation technologies such as generative algorithms. A popular question in these experiments relates to inequality: does the technology increase output…
Automation raises productivity and reduces paid human labor, but it also reallocates income and ownership claims. This paper studies that tradeoff in a static benchmark and in a stationary heterogeneous-agent general equilibrium. Firms…
Artificial intelligence (AI) is reshaping the labor market by changing the task content of occupations. This study investigates the impact of AI development on the emergence of new work, employment, and wages in the United States from 2015…
Common narratives about automation often pit new technologies against workers. The introduction of advanced machine tools, industrial robots, and AI have all been met with concern that technological progress will mean fewer jobs. However,…
Artificial Intelligence (AI) will change human work by taking over specific job tasks, but there is a debate which tasks are susceptible to automation, and whether AI will augment or replace workers and affect wages. By combining data on…
This study explores the link between the capital share and income inequality over the past four decades across 56 countries. Calculating the capital share from national accounts alongside top income share data from the World Inequality…
Generative Artificial Intelligence constitutes a new wave of automation. There is broad agreement among economists that humanity is potentially entering into a period of profound change. However, significant uncertainties and disagreements…
The Fourth Industrial Revolution commonly refers to the accelerating technological transformation that has been taking place in the 21st century. Economic growth theories which treat the accumulation of knowledge and its effect on…
Economists disagree about the factors driving the substantial increase in residual wage inequality in the US over the past few decades. To identify changes in the returns to unobserved skills, we make a novel assumption about the dynamics…
We note a simple mechanism that may at least partially resolve several outstanding economic puzzles, including why the cyclically adjusted price to earnings ratio of the S&P 500 index has been oddly high for the past two decades, why gains…
Economic competition between humans leads to income inequality, but, so far, there has been little understanding of underlying quantitative mechanisms governing such a collective behavior. We analyze datasets of household income from 67…
The implementation of a supervision and incentive process for identical workers may lead to wage variance that stems from employer and employee optimization. The harder it is to assess the nature of the labor output, the more important such…
The era of technological change entails complex patterns of changes in wages and employment. We develop a unified framework to evaluate the effects of capital-embodied technological change on, as well as the contributions of factor inputs…
The widening inequality in income distribution in recent years, and the associated excessive pay packages of CEOs in the U.S. and elsewhere, is of growing concern among policy makers as well as the common person. However, there seems to be…
Modern economies require increasingly diverse and specialized skills, many of which depend on the acquisition of other skills first. Here we analyse US survey data to reveal a nested structure within skill portfolios, where the direction of…