|Dr. Mary Kaltenberg
From Micro to Macro: Essays on Technological Change and Income Divergence
Bart Verspagen and Neil Foster-McGregor
Recently, there is a growing concern about the relationship between technological change and income inequality. This thesis investigates the nature of this relationship between individuals, industries and nations using a breadth of data sources. The benefits or concerns of the impact of technological change on income depends on the perspective of analysis. Within many European countries, the main driver of rising inequality is due to automation, and this effect is caused by the fast-changing composition of the workforce. While, at the industry level, one factor that is important in explaining wage differences between industries is knowledge diversity - individuals who work in knowledge diverse industries tend to earn more, and it is especially true for occupations that have more social and interpersonal skills. At the national level, technological capabilities have a positive effect on explaining economic growth rates, particularly for lower income countries. Technological change can have positive and unintended negative effects, and understanding the context in which technological change benefits or harms can help guide policy makers.