Entry Costs, Task Variety, and Skill Flexibility: A Simple Theory of (Top) Income Skewness

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Manoj Atolia ◽  
Yoshinori Kurokawa
Keyword(s):  
Technological Change ◽  
Numerical Experiments ◽  
Fixed Costs ◽  
Skilled Workers ◽  
Entry Costs ◽  
Setup Costs ◽  
Single Mechanism ◽  
English Speaking ◽  
Task Variety ◽  
The U.S

AbstractThis paper develops a simple model that provides a unified explanation for both an increase in below-top skewness and a much larger increase in within-top skewness of wage income distribution. It relies on a single mechanism based on the fixed costs of firm entry. A decrease in entry costs increases the variety of goods/tasks and thus the demand for higher-skilled workers who are more flexible in handling a variety of tasks, which increases both types of skewness. Differences in flexibility are modeled as differences in the fixed labor setup costs required to handle a given number of tasks. Our numerical experiments in a calibrated model show that a decrease in entry costs – entry deregulation – can be a quantitatively important source of both the increase in below-top skewness and the much larger increase in within-top skewness observed in the U.S. Moreover, the experiments imply that the observed differences in entry deregulation can cause significant differences in the top skewness across countries that have similar technological change. This can provide an answer to Piketty and Saez’s (2006) question: Why have top wages surged in English speaking countries in recent decades but not in continental Europe or Japan, which have gone through similar technological change?

Pathways of Technological Change

2014 ◽  
Vol 5 (1) ◽  
pp. 1-11 ◽  
Author(s):  
Jeffrey G. Woods
Keyword(s):  
Human Capital ◽  
Technological Change ◽  
Technical Change ◽  
Service Sector ◽  
Tax Revenue ◽  
Skilled Workers ◽  
Structural Unemployment ◽  
The Government ◽  
And Training ◽  
The U.S

While technological change benefits the U.S. service sector and the economy as a whole, the creation, design and production of innovations may favor highly-skilled over less-skilled workers. If skill-biased technical change creates more job vacancies for skilled, relative to less-skilled workers, less-skilled workers are at greater risk of becoming structurally unemployed. An epidemiological model is developed that describes the pathways to, and prevention of, structural unemployment (SU) of less-skilled workers. Less-skilled workers must protect themselves from being “infected” by the diffusion of skill-biased technical change in the service sector. They must choose to become “vaccinated” with “injections” of human capital to reduce the probability of contracting the “disease” of (SU) and to avoid permanently working in de-skilled jobs. By making less-skilled workers more productive, one can simultaneously improve the distribution of education and training, health and income inequality while providing the government more tax revenue.

The dollar, trade, technology and inequality in the USA

1998 ◽  
Vol 166 ◽  
pp. 78-86 ◽  
Author(s):  
Bob Anderton ◽  
Paul Brenton
Keyword(s):  
Technological Change ◽  
Relative Wage ◽  
Skilled Workers ◽  
Wage Bill ◽  
Sudden Rise ◽  
The Us ◽  
The Usa ◽  
Trade Competitiveness ◽  
The Impact ◽  
High Skill

The US experienced a considerable increase in inequality between skilled and less-skilled workers during the early 1980s—a period which corresponds with a large temporary appreciation of the dollar. This article investigates the reasons behind this rise in inequality by evaluating the impact of trade with low-wage countries (LWCs) and technological change on the wage bill share of skilled workers (which is designed to capture movements in inequality arising from changes in both the relative wage and employment opportunities of the less-skilled). We find that an increase in US imports from LWCs—encouraged by the large appreciation of the dollar in the early 1980s—seems to explain some of the rise in US inequality in low-skill-intensive sectors, but that technological change (proxied by R&D expenditure) explains the rise in inequality in high-skill-intensive sectors. However, given that the timing of the sudden rise in US R&D expenditure corresponds with the appreciation of the dollar, it may be the case that the deterioration in US trade competitiveness during this period contributed to the rapid increase in the rate of technological change via mechanisms such as ‘defensive innovation’. Hence one might also argue that the technology-based explanation for the rise in US inequality could actually be a trade-based explanation.

Univision, Telemundo, and the Rise of Spanish-Language Television in the United States

2020 ◽  
Author(s):  
Craig Allen
Keyword(s):  
United States ◽  
Mass Communication ◽  
The United States ◽  
Spanish Language ◽  
Spanish Speaking ◽  
History Of ◽  
English Speaking ◽  
American Society ◽  
The U.S

The first completely researched history of U.S. Spanish-language television traces the rise of two foremost, if widely unrecognized, modern American enterprises—the Spanish-language networks Univision and Telemundo. It is a standard scholarly history constructed from archives, original interviews, reportage, and other public materials. Occasioned by the public’s wakening to a “Latinization” of the U.S., the book demonstrates that the emergence of Spanish-language television as a force in mass communication is essential to understanding the increasing role of Latinos and Latino affairs in modern American society. It argues that a combination of foreign and domestic entrepreneurs and innovators who overcame large odds resolves a significant and timely question: In an English-speaking country, how could a Spanish-speaking institution have emerged? Through exploration of significant and colorful pioneers, continuing conflicts and setbacks, landmark strides, and ongoing controversies—and with revelations that include regulatory indecision, behind-the-scenes tug-of-war, and the internationalization of U.S. mass media—the rise of a Spanish-language institution in the English-speaking U.S. is explained. Nine chapters that begin with Spanish-language television’s inception in 1961 and end 2012 chronologically narrate the endeavor’s first 50 years. Events, passages, and themes are thoroughly referenced.

scholarly journals Growth Through Inter-sectoral Knowledge Linkages

2018 ◽  
Vol 86 (5) ◽  
pp. 1827-1866 ◽  
Author(s):  
Jie Cai ◽  
Nan Li
Keyword(s):  
General Equilibrium ◽  
Technological Change ◽  
Equilibrium Model ◽  
New Products ◽  
General Equilibrium Model ◽  
Fixed Costs ◽  
Aggregate Model ◽  
Firm Level ◽  
Firm Innovation ◽  
Aggregate Growth

Abstract The majority of innovations are developed by multi-sector firms. The knowledge needed to invent new products is more easily adapted from some sectors than from others. We study this network of knowledge linkages between sectors and its impact on firm innovation and aggregate growth. We first document a set of sectoral-level and firm-level observations on knowledge applicability and firms’ multi-sector patenting behaviour. We then develop a general equilibrium model of firm innovation in which inter-sectoral knowledge linkages determine the set of sectors a firm chooses to innovate in and how much R&D to invest in each sector. It captures how firms evolve in the technology space, accounts for cross-sector differences in R&D intensity, and describes an aggregate model of technological change. The model matches new observations as demonstrated by simulation. It also yields new insights regarding the mechanism through which sectoral fixed costs of R&D affect growth.

Technological Change, Market Decline, and Industrial Relations in the U.S. Steel Industry

1987 ◽  
pp. 229-245 ◽  
Author(s):  
Dennis A. Ahlburg ◽  
Ann E. Carey ◽  
Bruce A. Lundgren ◽  
Sandra L. Barrett ◽  
Lawrence D. Anderson
Keyword(s):  
Technological Change ◽  
Steel Industry ◽  
Industrial Relations ◽  
The U.S

scholarly journals Skill-Biased Technological Change and Inequality in the U.S.

2020 ◽  
pp. 91-107
Author(s):  
Ana Ferreira
Keyword(s):  
Income Inequality ◽  
Technological Change ◽  
Incomplete Markets ◽  
Gini Coefficient ◽  
Income Tax ◽  
Overlapping Generations ◽  
Overlapping Generations Model ◽  
Biased Technological Change ◽  
Household Heterogeneity ◽  
The U.S

Since the 1980s, income inequality has increased markedly and has reached the highest level ever since it started being recorded in the U.S. This paper uses an overlapping generations model with incomplete markets that allows for household heterogeneity that is calibrated to match the U.S. economy with the purpose to study how skill-biased technological change (SBTC) and changes in taxation quantitatively account for the increase in inequality from 1980 to 2010. We find that SBTC and taxation decrease account for 48% of the total increase in the income Gini coefficient. In particular, we conclude that SBTC alone accounted for 42% of the overall increase in income inequality, while changes in the progressivity of the income tax schedule alone accounted for 5.7%.

scholarly journals HUMAN CAPITAL AND ITS ROLE IN THE FOURTH INDUSTRIAL REVOLUTION

2021 ◽  
Author(s):  
Yelyzaveta Snitko ◽  
Yevheniia Zavhorodnia
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Labor Market ◽  
Technological Change ◽  
Industrial Revolution ◽  
Skilled Workers ◽  
Fourth Industrial Revolution ◽  
Modern Economy ◽  
The Future ◽  
The Impact

The development of a modern economy, in the context of the fourth industrial revolution, is impossible without the accumulation and development of human capital, since the foundation of the transformation of the economic system in an innovative economy is human capital. In this regard, the level of development and the efficiency of using human capital are of paramount importance. This article attempts to assess the role of human capital in the fourth industrial revolution. In the future, human talent will play a much more important role in the production process than capital. However, it will also lead to a greater division of the labor market with a growing gap between low-paid and high-paid jobs, and will contribute to an increase in social tensions. Already today, there is an increase in demand for highly skilled workers, especially in high-income countries, with a decrease in demand for workers with lower skills and lower levels of education. Analysis of labor market trends suggests that the future labor market is a market where there is simultaneously a certain demand for both higher and lower skills and abilities, combined with the devastation of the middle tier. The fourth industrial revolution relies heavily on the concept of human capital and the importance of finding complementarity between human and technology. In assessing the impact of the fourth industrial revolution, the relationship between technology, economic growth and human resources was examined. The analysis was carried out in terms of three concepts of economic growth, technological change and human capital. Human capital contributes to the advancement of new technologies, which makes the concept of human capital an essential factor in technological change. The authors emphasize that the modern economy makes new demands on workers; therefore it is necessary to constantly accumulate human capital, develop it through continuous learning, which will allow the domestic economy to enter the trajectory of sustainable economic growth. The need to create conditions for a comprehensive increase in the level of human capital development is noted.

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