Power-Biased Technological Change and the Rise in Earnings Inequality

Authors

Frederick Guy
Peter Skott

Working Paper Number

2005-17

Publication Date

2005

Abstract

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 ob- served increase in effort.

DOI

https://doi.org/10.7275/1069116

Recommended Citation

Guy, Frederick and Skott, Peter, "Power-Biased Technological Change and the Rise in Earnings Inequality" (2005). Economics Department Working Paper Series. 53.
https://doi.org/10.7275/1069116