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Technological change and income distribution in Europe
Author(s) -
PERUGINI Cristiano,
POMPEI Fabrizio
Publication year - 2009
Publication title -
international labour review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.433
H-Index - 46
eISSN - 1564-913X
pISSN - 0020-7780
DOI - 10.1111/j.1564-913x.2009.00051.x
Subject(s) - complementarity (molecular biology) , technological change , economics , labour economics , inequality , economic inequality , income distribution , investment (military) , distribution (mathematics) , technical change , demographic economics , macroeconomics , productivity , mathematical analysis , genetics , mathematics , biology , politics , political science , law
. This article provides empirical evidence of the link between technological change and overall income inequality in 14 EU countries. The analysis begins by testing the skill‐biased technological change (SBTC) hypothesis in sectors with different levels of technology intensity. After confirming the skill complementarity of technology and the predominantly skill‐replacing character of investment, the analysis turns to sectoral changes in skilled‐labour demand as a possible determinant of income inequality. It finds a non‐linear relationship between SB TC and inequality in five of the eight sectors considered, suggesting an inverted U‐shaped pattern that can be explained by stages in labour demand and supply adjustments over time.