In the last decades there has been a lot of concern about structural changes in the labour market, such as the routinization of tasks, the polarization of wages and the skill-biased technological change. A lot of studies about these structural changes have been published (for example Brynjolfsson and McAfee 2014, Autor, Levy and Murnane 2003, Piva and Vivarelli 2017, DESA 2017), but the most comprehensive study is Autor and Salomons (2017), that is the starting point of my research.
In this study I am going to find and explain the effects of innovation on inequality in the labour market both within and between different industries (or at least sectors) and answer questions like: Are the structural changes previously mentioned enough to explain the increase of inequality in the labour market, or are there other channels tied to innovation? And if this is the case which are these channels? Has innovation the same effects in all sectors?
I am going to study also some indirect effects, for example if a new product destroys jobs in one industry it may create more jobs in other industries in the same sector or in other sectors, in this case links between industries and sectors and mobility of workers may be important to reduce the temporary negative effects of the job destruction. Increase in productivity in one sector (or industry or firm) may also change the demand of labour in other sectors (or industries or firms), so I am going to try to find the substitutabilities and complementarities between sectors and industries.
In this study I am going to use data from surveys at the european level, mainly published by EUROSTAT and the European Commission (e. g. EUSILC), but also from other institutions (e. g. EUKLEMS, CEPR). As there are more variables easy to be found and computed I am focusing on product innovation rather than process innovation.
Although the field of my research is not new and there is a lot of literature about the effects of innovation on the labour market, most of the contributions consider the effects on occupation and wages, rather than on inequality. In addition, for my knowledge, only the Autor and Salomons study of 2017 analyzes the effects of innovation at a macrosector level, but only on the dynamics of wages and occupation and not on wage inequality. The few authors that analyze the effects of innovation on wage inequality use aggregated data with only regional or state effects and urban/non-urban contrast without considering neither the different sector composition nor the different levels of wages and occupation and for this reason they don¿t consider the effects of structural changes (for example the reduction of the manufacturing sector) on inequality.
To sum up the research will not be as innovative as other researches might be, but it will represent a new step forward to understand and explain the effects of innovation in the labour market at a micro or meso level. The industry and/or sectoral levels of analysis allow also to more targeted policies about innovation that could be more effective in increasing wages and occupation without increasing wage inequality. They may also explain at which level inequality is increasing the most, not only because of innovation but also because of other reasons, so the utility of this study might go beyond the economics of innovation towards the labour economics and other branches of economics.