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Risk of technological unemployment and support for redistributive policies
Abstract
In recent years, the economic literature has highlighted the rising employment risks related to technological change. On the comparative political economy side, exposure to labor market risks has been investigated as a source of preferences for redistribution, but technological change has not been so far framed as a distinctive risk. In this paper, we argue that occupational risk related to technological change can be a relevant driver for preferences for redistribution, and in particular for support for social policies geared at protecting workers from lack of income. We test our hypothesis on Italy, using data from the 8 th Round of the European Social Survey, including unique data on support for minimum income schemes (GMI) alongside universal basic income (UBI), and a measure of subjective (perceived) risk of technological unemployment alongside an objective one based on tasks substitutability (the RTI introduced by Autor and Dorn in 2013). Our results show that objective exposure to automation is only lightly correlated with the perceived risk of technological unemployment, and that higher levels of RTI significantly correlate with support for some income protection measure, most notably GMI as opposed to UBI. Thus exposure to the risk of technological unemployment is a significant determinant of support for means-tested, conditional measures, but this is not necessarily the case with unconditional measures such as a universal basic income.
... The rapid development of artificial intelligence (AI) and machine learning (ML) is leading the way to a new era of automation, and routine-task-intensive occupations are likely to bear the brunt of job losses. Indeed, workplace automation has been a major disruptor of employment structures in many advanced economies (Goos et al., 2014;Sacchi et al., 2020). ...
... In line with theoretical predictions, several recent studies have found that individuals in routine occupations were more likely to support social redistribution, given their greater exposure to unemployment risks (Thewissen & Rueda, 2019;Busemeyer & Sahm, 2021). Recent empirical research has found that automation-threatened workers demonstrated stronger support for active labor market policies (Im, 2021) and minimum income schemes (Sacchi et al., 2020), but were unsupportive of social investment policies (Busemeyer & Sahm, 2021). Overall, employment insecurity triggered by workplace automation clearly alters the welfare preferences of (potentially) affected employees towards greater social protection, through a battery of self-interest mechanisms. ...
... Following this, emerging studies posit that individuals' social policy preferences vary among occupations according to their degree of exposure to automation replacement. Those with higher automation replacement risks are expected to express stronger preference for social policies (Thewissen & Rueda, 2019;Sacchi et al., 2020;Busemeyer & Sahm, 2021;Im, 2021). Needless to say, such social policy demands exert political pressure on governments in liberal democratic societies through organized trade union activities and, ultimately, electoral links. ...
Workplace automation fueled by technological innovations has been generating social policy implications. Defying the prevalent argument that automation risk triggers employment insecurity and prompts individuals to favor redistribution, this study doesn't find empirical evidence in the Chinese context. Analyzing national survey data, this study reveals a very strong association between automation risk and popular preference for government responsibility in old-age support. Further analysis suggests that more generous local welfare systems generate a reinforcing effect between automation risk and individuals' support for government involvement in old-age support. In a welfare system in which major redistributive policies are not employment-dependent, automation risk may not necessarily trigger stronger preferences for short-term immediate protection through redistributive programs, but may stimulate individuals to project their need for social protection towards middle-or longer-term and employment-related policies. The generosity of subnational welfare systems moderates the formation of individuals' social policy preferences through policy feedback.
... In this paper, I focus on employed workers who are threatened by unemployment from workplace automation. Workplace automation is a major disruptor of employment structures in contemporary advanced economies (Goos, Manning, & Salomons, 2014;Oesch & Rodríguez Menés, 2011;Sacchi, Guarascio, & Vannutelli, 2020). Numerous studies show that employment shares for occupations consisting of routine tasks, namely job activities that are repetitive and codifiable, have declined relative to employment shares for occupations consisting of nonroutine tasks (Autor, Levy, & Murnane, 2003;Biagi & Sebastian, 2020;Goos, Manning, & Salomons, 2014). ...
... Contemporary workers are exposed to unemployment risks arising from various labour market disruptions such as job offshoring and international trade (Autor et al., 2013). Here, I focus on unemployment risk from one major disruption: workplace automation (Sacchi, Guarascio, & Vannutelli, 2020;Thewissen & Rueda, 2017). ...
... Biagi and Sebastian (2020) conducted a meta-review of 12 influential studies to assess the robustness of RBTC as an explanation of recent changes to employment patterns. The authors find that most of the reviewed studies confirm that job polarization has taken place, and it is attributable to RBTC. 3 At the level of workers, RBTC implies that workers in occupations with more routine tasks experience greater unemployment risk than workers in occupations with more nonroutine tasks (Sacchi, Guarascio, & Vannutelli, 2020;Thewissen & Rueda, 2017). Yet, it is important to highlight that unemployment risk does not equate to actual unemployment (Rovny & Rovny, 2017). ...
How does unemployment risk affect workers’ support for demanding active labour market policies (ALMPs)? There may be a substantial number of workers who experience unemployment risk from labour market disruptions. Yet, we know less about its impact on demanding ALMP support than the impact of unemployment status. Here, I explore the impact of unemployment risk through automation. Automation-threatened workers’ support for demanding ALMPs may be influenced by two opposing considerations that are linked to their potential reliance on welfare. Firstly, they may worry about barriers to welfare access. Secondly, they may worry about welfare competition, especially under austerity. Their support for demanding ALMPs would hence depend on which consideration they find to be most salient. Based on European Social Survey (2016) data on West European countries, I find that automation-threatened workers significantly support such policies. This may indicate that they find welfare competition concerns more salient than welfare access ones.
... Only a handful of studies find a positive association between technological risk exposure and support for activating policies (Im, 2021), while others report a null or even negative relationship (Kurer and Häusermann, 2022;Busemeyer and Tober, 2022;Busemeyer and Sahm, 2022). By contrast, a majority of studies looking at passive labor market policy or support for redistribution do find a positive association between technological risk and support (Kurer and Häusermann, 2022;Busemeyer and Tober, 2022;Sacchi, Guarascio and Vannutelli, 2020;Dermont and Weisstanner, 2020;Thewissen and Rueda, 2019), although some also report null findings. There are no clear differences in patterns based on whether studies use subjective or objective risk measures - Kurer and Häusermann (2022), Busemeyer and Tober (2022), and find similar effects across these types of measures, while Sacchi, Guarascio and Vannutelli (2020) find an effect of RTI but not subjective risk on support for passive labor market policy. ...
... By contrast, a majority of studies looking at passive labor market policy or support for redistribution do find a positive association between technological risk and support (Kurer and Häusermann, 2022;Busemeyer and Tober, 2022;Sacchi, Guarascio and Vannutelli, 2020;Dermont and Weisstanner, 2020;Thewissen and Rueda, 2019), although some also report null findings. There are no clear differences in patterns based on whether studies use subjective or objective risk measures - Kurer and Häusermann (2022), Busemeyer and Tober (2022), and find similar effects across these types of measures, while Sacchi, Guarascio and Vannutelli (2020) find an effect of RTI but not subjective risk on support for passive labor market policy. On balance, existing research suggests that technological exposure leads to greater support for passive, compensatory policies than activating ones, and that contextual factors such existing welfare state institutions or education systems may play a moderating role (Busemeyer and Sahm, 2022;Gingrich and Ansell, 2012;Haslberger, Emmenegger and Durazzi, 2023). ...
... There are two dominant approaches to explain how automation has shaped contemporary employment structures: skill-biased technological change (SBTC), and routine-biased technological change (RBTC). SBTC sought to explain employment pattern changes in the 1980s, whereas RBTC built on SBTC to explain employment pattern changes from the late 1990s (Sacchi et al., 2020). Both approaches concur that high wage occupations, which tend to require higher skills, have benefited most from automation. ...
... As routine occupations slowly die out, the value of routine work also diminishes, leaving routine workers with the threat of social decline (Gidron and Hall, 2019: 6;Hochschild, 2016: 141;Kurer, 2020). Worse, these jobs previously accorded routine workers dignity through permanent employment (Sacchi et al., 2020). Routine workers may hence further agonise about the decline in values attached to these jobs (Kurer, 2020). ...
Automation has permeated workplaces and threatens labour in the production process. Concurrently,
European governments have expanded workfare which imposes stringent conditions and sanctions on
unemployed workers after the onset of austerity. We explore how automation risk affects workfare support.
Recent research finds that most routine workers ‘survive’ in their routine jobs. Despite avoiding unemployment,
routine workers may face the threat of status decline as automation erodes the value of routine work. They
may respond by differentiating themselves from lower-ranked social groups such as unemployed workers.
Such boundary drawing may manifest views that the unemployed are less deserving of welfare. We thus posit
that routine workers may support workfare to assuage their fears of status decline. We further explore if
worsening economic hardship, proxied as rising unemployment rates over time, increases their support for
workfare. We conducted pooled and multilevel analyses using data from the European Social Survey. We find
that routine workers significantly support workfare. We also find that routine workers support workfare
when economic hardship worsens, but oppose it when conditions ameliorate. Findings suggest that status
threat is an important channel by which automation risk may affect workfare support, but its impact depends
on social context, hence yielding country-differences. Worsening economic hardship may exacerbate routine
workers’ status decline fears, and intensify their harsh views against unemployed workers. Automation risk
may thus have a greater impact on workfare support under such conditions. Policymakers can use these
findings to assess how workfare may be publicly received and under various economic conditions.
... In the same vein, Busemeyer and Sahm (2022) find no statistically significant association between individual automation risk and support for basic income. In contrast, Sacchi et al. (2020) find that RTI is correlated with support for UBI among some subgroups of voters in Italy. Again, the evidence is mixed. ...
Technological change is causing major transformations in the nature of work and the labor market. As a result, there is a growing interest in studying the relationship between automation of jobs and attitudes toward universal basic income as a potential solution to address the socioeconomic challenges posed by technological advancements. Hence, the exploration of a universal basic income and other innovative ways to restructure the welfare state has become crucial in navigating the complexities of the digital economy and automation. Drawing on data from the Barometer of Political Opinion of Catalonia, Spain, our study reveals nuances insights. We observe that individuals facing a high risk of job automation have a negative impact on support for selectively targeted, means-tested basic income. In addition, while concerns about technological displacement are prevalent, there is no clear correlation between perceived and objective risk of automation-induced job loss. Contextual information about automation also does not significantly influence support for universal basic income scheme or a guaranteed citizenship income. However, individuals who perceive their work tasks as automatable are more inclined to endorse a universal basic income, highlighting the complex interplay between technological change, socioeconomic perceptions, and attitudes toward welfare policy.
... It distinguishes between general redistribution preferences to more specific areas of labour market policy (LMP) preferences: passive LMP, universal basic income, and active LMP. I include both comparative studies on automation risk and policy preferences (Thewissen and Rueda, 2019, Dermont and Weisstanner, 2020, Im, 2021, Busemeyer and Sahm, 2021, Kurer and Häusermann, 2021, Im and Komp-Leukkunen, 2021, Busemeyer and Tober, 2021 and studies with original survey data from single country contexts (Gallego et al., 2021a, Jeffrey, 2021, Sacchi et al., 2020, Guarascio and Sacchi, 2021. Many studies use the routine task intensity (RTI) as their measure for objective risk of automation, although some rely on alternative indicators by Arntz et al. (2016) or Frey and Osborne (2017). ...
... Other studies have found no association between automation risk and support for a universal basic income(Dermont and Weisstanner 2020). Findings are mixed regarding the link between tech-related risks and support for active labour market and social investment policies(Sacchi et al. 2020;Busemeyer and Sahm 2021;Guarascio and Sacchi 2021;Im 2021). Regarding globalization-related risks, the important work of Walter (2010 e 2017) has shown that globalization (more specifically at individual level: the risk of offshoring) is an important driver of redistribution support as well. ...
... However, earlier research has not found strong links between automation-another disruption against which UBI might in principle provide a remedy-and political support for UBI. Although two studies from Italy find a link between objective automation risk and support for UBI (Guarascio & Sacchi, 2021;Sacchi et al., 2020), this has not been confirmed in comparative studies of UBI support (Busemeyer & Sahm, 2021;Dermont & Weisstanner, 2020). Hence, people at risk of employment disruptions from technological change did not widely seem to perceive UBI as a potential policy response to counter the effects of automation before the pandemic. ...
The COVID-19 pandemic has revived discussions about universal basic income (UBI) as a potential crisis response. Yet despite favorable circumstances, little actual policy change in this area was observed. This article seeks to explain this absence of policy change and to reflect on the prospects for introducing UBI schemes after the pandemic in European democracies. I argue that public opinion on UBI provides few electoral incentives to push for social policy change. Using prepandemic data from 21 European democracies and pandemic data from the UK, I show that political support for UBI has been divided between different groups who advocate conflicting policy goals and who hold divergent views about existing welfare state arrangements. While support for UBI might have increased during the pandemic, the underlying political dividing lines are likely to have remained intact. Due to these enduring divisions and the stable support for existing social policy arrangements over an untested policy, the prospects for introducing UBI schemes in the post-pandemic world remain uncertain.
... Likewise, perceived risks in job losses can also affect political behaviour as workers look for reassurances (Sacchi, Guarascio and Vannutelli, 2020). ...
SAQA continues to deepen and expand its understanding of the Fourth Industrial Revolution (4IR) and its implications for the South African National Qualifications Framework (NQF) and the broader education and training landscape in South Africa. As the custodian of the NQF and being responsible for its further development and implementation, SAQA’s commitment resonates with its overarching vision, which is to have a world-class NQF that works for the people in South Africa. A SAQA Bulletin that focuses on The NQF and the 4IR is a key step towards engaging with good practices and innovations in education, training and the workplace.
With SAQA Bulletin 2020(1), SAQA continues to share with education and training stakeholders, new knowledge, good practice and innovations that are responsive to the needs of society and the economy. This Bulletin contains a spread of richly textured innovations in and beyond South Africa. It is hoped that readers of the Bulletin will consider and engage around the insights presented, and that this involvement will enable the sector to harness and use its resources efficiently and effectively for the benefit of all.
... In particular, there is scant empirical evidence on the relative importance of routine-task vis-à-vis other supply and demand factors in accounting for individuals' employment-unemployment transitions. In fact, technological unemployment risks have to a large extent been investigated by looking into long-term changes in employment composition across countries and sectors (Acemoglu and Restepo, 2017;Feldman, 2013;Van Roy et al. 2018), while less is known about what happens in terms of individual risks (a notable exception is the recent contribution by Sacchi et al. 2020). This is mostly due to the lack of comprehensive micro-level databases providing information on the evolution of individuals' labor market status (i.e. ...
Relying on a unique longitudinal integrated database supplying micro-level information on labor market transitions (concerning the 2011-2017 period) and occupation task characteristics (e.g. routine-task intensity), this paper provides fresh evidence of the determinants of unemployment risk in Italy. We find that workers employed in routine-intensive occupations (measured with the RTI proposed by Acemoglu and Autor, 2011) do not display-on average-higher unemployment risks than the rest of the workforce. However, on distinguishing between cognitive and manual tasks, it turns out that workers employed in occupations entailing a large proportion of routine cognitive tasks (such as workers employed in service occupations as cashiers or call-center operators) are in fact exposed to a relatively higher risk of becoming unemployed. By contrast, a rather lower risk seems to be faced by workers employed in occupations entailing a large proportion of routine-manual tasks. Finally, the distribution of unemployment risk and its relation with routine-task intensity varies significantly across sectors-with higher risk in manufacturing and construction-confirming the importance of industry-level economic, technological and institutional heterogeneities.
... Empirical evidence on this respect is limited, because aggregate measures of redistribution (such as the difference in the extent of inequality before and after redistribution) fail to capture heterogeneity of exposure to benefits and taxes in the population, which is driven by the distribution of demographics and income, by employment status and by the actual fiscal policy rules. Exceptions are Sacchi et al. (2020) and Thewissen and Rueda (2019), who explore unemployment risk induced by the extent of automation in the economy to assess the extent at which welfare state generosity affects support for redistribution, holding income of the respondents and income inequality in the country as fixed. ...
This paper provides evidence that attitudes towards redistribution are associated with the extent of generosity of the redistributive context experienced by the individual, as measured by the likelihood of receiving positive benefit transfers net of fiscal contribution. We estimate reduced form tax-benefit equations with the EU Statistics on Income and Living Conditions (EU-SILC), and match the implied parameters to the respondents of the European Social Survey (ESS) on the basis of their characteristics. The period of analysis is 2008–2016. For identification, we exploit exogenous cross-country and time variation in tax rules and market income to disentangle implications of exposure to tax-benefit rules on preferences for redistribution from the effects of changes in income inequality. We find that exposure to positive net benefits increases support for redistribution by 1.4%–3% on baseline models, the effect being robust across a variety of specifications.
... All these contributions analyse explicitly the role of experienced or expected inequalities on preferences for redistribution, holding the exposure to actual redistribution as fixed. There is little evidence on the effect of the actual welfare state generosity on preferences for redistribution, holding income risk and inequality fixed (two exceptions are Sacchi et al. 2020 and Thewissen and Rueda 2017). ...
This paper provides evidence that attitudes towards redistribution are associated with the extent of generosity of the redistributive context experienced by the individual, as measured by the likelihood of receiving positive benefit transfers net of fiscal contribution. We estimate reduced form tax-benefit equations with the EU Statistics on Income and Living Conditions (EU-SILC), and match the implied parameters to the respondents of the European Social Survey (ESS) on the basis of their characteristics. The period of analysis is 2008-2016. For identification, we exploit exogenous cross-country and time variation in tax rules and market income to disentangle implications of exposure to tax-benefit rules on preferences for redistribution from the effects of changes in income inequality. We find that exposure to positive net benefits increases demand for redistribution by about 1.2%, the effect being robust across a variety of specifications. The signs of the effects are consistent with those predicted by a simple model where exposure to redistribution affects expectations for consumption, but risk averse individuals discount this effect by the nature of income shocks they are exposed to in the market.
JEL classification: D31, D63, D72, H20
... uesto contributo ha fornito alcune indicazioni preliminari riguardo alle dinamiche di politics che potrebbero favorire un allargamento della protezione sociale in un'epoca di austerità permanente. Le riflessioni effettuate vertono soprattutto su scelte e preferenze di attori sociali e partitici, sebbene alcuni contributi recenti mostrino come fattori esogeni -e in particolare una posizione lavorativa più a rischio di 'scomparire' a causa del cambiamento tecnologico (Guarascio e Sacchi, 2018;Vlandas, 2018) -possano contribuire a rendere più forte il supporto nella popolazione, indipendentemente dalla presenza o meno di attori che si fanno portavoce di tali strumenti. ...
Through an analysis of secondary literature, this paper aims to provide preliminary evidence of the existence of political mechanisms that, unexpectedly, may foster the introduction of social policy reforms favouring the most vulnerable and the most disempowered sectors of the population in an age of harsh competition among social groups for a declining amount of social policy resources. In doing so, it aims to contribute to the overall debate on the ‘political feasibility’ of expanding non-contributory income maintenance benefits in an age of austerity.
Research shows that public backing for policy proposals is an important pillar of policy change, and welfare reform or Basic Income is no exception. This chapter presents a review of the research on preferences for Basic Income and more specifically, what we know on the individual-level determinants of policy support, the effect of policy characteristics, the effects of context and more novel research in terms of information and framing. While scholarship has accumulated consistent evidence on the individual-level and contextual determinants, many open questions remain on the mechanisms underpinning this support, and we know comparatively far less on the effects of policy design and information.
How do the labor market risks associated with technological change affect policy preferences? We argue that higher perceptions of technology-related risks should increase support for compensation and decrease support for social investment. We expect the opposite effect for individuals who use technology constantly at work, have a university degree and earn higher incomes. However, as the perception of technology-related employment risks in the latter group of individuals increases, so does their preference for compensatory and protective policy solutions to technological change. Our expectations are confirmed by novel data from a survey of 24 diverse Organisation for Economic Co-operation and Development (OECD) countries that includes specifically designed questions on technology-related risks and policy preferences. The results suggest that technology-related risks not only correlate with certain demographic and occupational characteristics, but also cross-cut them. Thus, technology-related risks might not only become a source of new cleavages between the losers and winners of technological change, but also the basis for new cross-class coalitions.
Relying on a unique longitudinal integrated database supplying micro-level information on labor market transitions (concerning the 2011–2017 period) and occupation task characteristics (e.g. routine-task intensity), this paper provides fresh evidence of the determinants of unemployment risk in Italy. We find that workers employed in routine-intensive occupations (measured with the RTI proposed by Acemoglu and Autor in Handb Labor Econ 4B:1043–1171, 2011) display—on average—higher unemployment risks than the rest of the workforce. This result is driven by workers employed in occupations entailing a large proportion of routine cognitive tasks and it is concentrated in high and medium–low skill occupations. In addition, the distribution of unemployment risk and its relation with routine-task intensity varies significantly across sectors—with higher risk in manufacturing and construction—confirming the importance of industry-level economic, technological and institutional heterogeneities. Finally, by exploring the gender dimension, we find that that being in a routine-intensive occupation increases unemployment risk for male workers only.
Rapid technological change – the digitalization and automation of work – is challenging contemporary welfare states. Most of the existing research, however, focuses on its effect on labor market outcomes, such as employment or wage levels. In contrast, this paper studies the implications of technological change for welfare state attitudes and preferences. Compared to previous work on this topic, this paper adopts a much broader perspective regarding different kinds of social policy. Using data from the European Social Survey, we find that individual automation risk is positively associated with support for redistribution, but negatively with support for social investment policies (partly depending on the specific measure of automation risk that is used), while there is no statistically significant association with support for basic income. We also find a moderating effect of the overall size of the welfare state on the micro-level association between risk and preferences.
After a decade of inertia, that left it unprepared to withstand the blow of the great recession, the Italian welfare state has witnessed significant changes since 2012. Externally driven consolidation in the wake of the sovereign debt crisis spurred yet another wave of social policy reforms after that of the 1990s. These reforms did not however invariably entail retrenchment. Both the Monti and the Renzi governments combined liberalisation with expansion of social rights, particularly in income support. As a result, the Italian welfare state looks more comprehensive than it was before the crisis. At the same time, there was no overall strategy of welfare modernisation based on coordinated social investment measures. The changes in Italian social policy since the outburst of the great recession highlight the importance of domestic politics interacting with external drivers of change. They also facilitate an assessment of the opportunity structures for further reforms in a political system that appears to be veering again towards consensus democracy.
Most scholars have highlighted the commonalities of labour market reforms under austerity in Europe, mostly in terms of liberalization. We argue that a more differentiated analysis is in order, as empirical developments point to distinct reform trajectories. We analyse in detail the two Southern European cases where pressure for austerity was intense, but governments maintained a degree of discretion as they were not subjected to direct bailout conditions: Italy and Spain. We examine the period since 2010, which includes a major labour market reform in each of the two states in 2012. Using a theoretical framework that allows distinguishing forms of liberalization, we find that reforms in the two states indeed differed markedly. In Spain, flexibilization and declining coverage of protection prevailed, whereas in Italy flexibilization was combined with improved protection of workers at the margin of the labour market. The differing influence of the centre-left helps to explain this divergence.
What happens to welfare states when conditional financial aid is provided by an external financial actor? The conventional wisdom is that conditionality brings about welfare state retrenchment. The two cases analysed in this article – Korea during the financial crisis of 1997–1998 and Italy during the Eurozone crisis since 2011 – do not seem to confirm this received wisdom. This article tackles the puzzle of expansionary welfare reforms in the presence of economic conditionality, as transpired in Italy and Korea. We argue that conditionality and its contents interacted with, activated and had an impact on domestic political dynamics that led to progressive choices in welfare policy. Utilizing the Most Different Systems Design, we stress the importance of government ideology or partisanship and political contestation and competition – focusing on political actors that could threaten the government’s legitimacy when acquiescing to conditionality if not balancing neoliberal elements with expansion of social rights – and political agency underpinning government strategies in effectively introducing and implementing policy reforms.
We analyze the effect of rising Chinese import competition between 1990 and 2007 on local U.S. labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization while instrumenting for imports using changes in Chinese imports by industry to other high-income countries. Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in exposed labor markets.
Introduction
The Italian labour market has undergone dramatic changes over the last 20 years. It has been strongly liberalised since the mid-1990s through a series of reforms, initially aimed at fixed-term employment relationships only but, more recently, also targeting open-ended contracts. The share of employees with fixed-term contracts has tripled since the beginning of the 1990s, and increased fivefold in the younger age groups. In 2012, more than 80% of new labour contracts established in Italy were fixed-term contracts, and 40% of them lasted less than six months (ISFOL, 2013a), with potentially dreadful effects on productivity. At the same time, income support has also been reformed, with the upgrading of existing schemes and, lately, the introduction of new ones. Contrary to what has happened in most European countries, therefore, the level of income protection for those who lose their job has been increased (admittedly from a low starting level). Similarly to trends occurring across all advanced capitalist countries, an emphasis on benefit recipient activation and the establishment of ensuing work conditionality requirements have been introduced. However, the upgrading of income support has not maintained the pace of (both regulatory and structural) changes in the labour market, bringing about a condition of ‘flex-insecurity’ (Berton et al, 2012). As for the activation measures, their implementation has been soft and incomplete, in part, as a consequence of the ineffectiveness of Public Employment Services (PES), both in the control of beneficiaries and in the provision of services to the unemployed. Moreover, investment in active labour-market measures has been mostly directed to hiring subsidies for employers rather than to vocational training and employment services, therefore failing to address structural problems. The area of active labour-market policies (ALMPs) is, indeed, the field of labour policy where the distance between Italy and the other large European countries is the greatest, in a context characterised by huge regional variability in the availability of both institutional capacity and labour-market opportunities.
This chapter is structured as follows: the next section provides the reader with a basic depiction of the Italian labour market, its evolution during the crisis and its main segmentation dimensions.
In this essay, I begin by identifying the reasons that automation has not wiped out a majority of jobs over the decades and centuries. Automation does indeed substitute for labor—as it is typically intended to do. However, automation also complements labor, raises output in ways that leads to higher demand for labor, and interacts with adjustments in labor supply. Journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor. Changes in technology do alter the types of jobs available and what those jobs pay. In the last few decades, one noticeable change has been a "polarization" of the labor market, in which wage gains went disproportionately to those at the top and at the bottom of the income and skill distribution, not to those in the middle; however, I also argue, this polarization is unlikely to continue very far into future. The final section of this paper reflects on how recent and future advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth. I argue that the interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine, codifiable tasks while amplifying the comparative advantage of workers in supplying problem-solving skills, adaptability, and creativity.
Poverty, increased inequality, and social exclusion are back on the political agenda in Western Europe, not only as a consequence of the Great Recession that hit the global economy in 2008, but also as a consequence of a seemingly structural trend towards increased inequality that began some time ago. How can we explain this increase in inequalities? In this book, it is argued that social and labor market policies contribute to shaping the forms and extent of the new inequalities and divides that challenge European societies. Growing inequality is related to processes of dualization, i.e. a widening, deepening, or the creation of new insider-outsider divides. The processes of division in the realms of labor markets, social policy and political representation are strongly linked. Dualization is certainly not the only driver of increasing inequality, but because of the encompassing development evidenced in this book, dualization appears one of the most important current trends affecting developed societies. However, the extent and forms of dualization observed vary greatly across countries. The comparative perspective of this book provides insights into why some countries witness lower levels of insider-outsider divides, whereas for others, they have become a core characteristic. Most importantly, the comparisons presented in this book point to the crucial importance of politics and political choice in driving and shaping the social outcomes of deindustrialization. Governments "cope" in different ways with deindustrialization. Hence, while increased structural labor market divides can be found across all countries, governments have a strong responsibility in shaping the distributive consequences of these labor market changes. Insider-outsider divides are not a straightforward consequence of deindustrialization, but rather the result of policy, i.e. of political choice.
The knowledge economy, deindustrialization, and the decline of Fordism have undermined the economic complementarities that once existed between skilled and semiskilled workers. The result has everywhere been a decline in coordinated wage bargaining and unionization and a notable rise in labor market inequality. Yet, the political responses have been very different across advanced democracies. While labor markets for part-time and temporary employment have been deregulated across the board, some countries have compensated losers through increased cash transfers and active labor market programs and others have allowed inequality and insider-outsider divisions to grow deeper. The article argues that the divergent government responses reflect differences in underlying electoral coalitions, and that these in turn mirror the structure of party and electoral systems. The authors support their argument with evidence for government responses to economic shocks in the period 1980 to 2010.TORBEN IVERSEN is Harold Hitchings Burbank Professor of Political Economy at Harvard University. He is the coauthor, with Frances Rosenbluth, of Women, Work, and Politics (2010); and author of Capitalism, Democracy, and Welfare (2005) and Contested Economic Institutions (1999). Iversen has published widely on comparative politics and political economy. He can be reached at tiversen@gov.harvard.edu.DAVID SOSKICE is School Professor of Political Science and Economics at the London School of Economics and Political Science. He gave the 2013 Federico Caffè Lectures in Rome on knowledge economies. His books include Macroeconomics: Instability, Institutions, and the Financial System, coauthored with Wendy Carlin (2015). His current research, with TorbenIversen, is on advanced capitalism. Soskice was president of the European Political Science Association from 2011-13, and he is a fellow of the British Academy. He can be reached at d.w.soskice@lse.ac.uk.
Recent research has established that employment risk shapes social policy preferences. However, risk is often conceptualized
as an alternative measure of the socio-economic status. We show that employment risk and socio-economic status are distinct,
crosscutting determinants of social policy preferences. More specifically, we analyze the policy preferences of high-skilled
labor market outsiders as a cross-pressured group. We first establish that labor market vulnerability has spread well into
the more highly educated segments of the population. We then show that the effect of labor market vulnerability on social
policy preferences even increases with higher educational attainment. We conclude that that labor market risk and educational
status are not interchangeable and that the high skilled are particularly sensitive to the experience of labor market risk.
Thereby, our findings point to a potential cross-class alliance between more highly and lower skilled vulnerable individuals
in support of a redistributive and activating welfare state. Thus, they have far-reaching implications for our understanding
of both the politicization of insider/outsider divides and the politics of welfare support.
The political economy literature has gathered compelling evidence that labour market risks shape political preferences. Accordingly, insecurity fuels support for redistribution and left parties. This article analyses this argument for temporary workers, a so far neglected risk category which has increased dramatically in the past two decades. Temporary workers also have been in the focus of recent insider-outsider debates. Some authors in this line of research have argued that temporary work leads to political disenchantment – for example, non-instrumental responses such as vote abstention or protest voting. This contradicts risk-based explanations of political preferences. The article discusses both theoretical perspectives and derives conflicting hypotheses for the empirical analysis of temporary workers' policy and party preferences. The review reveals considerable ambiguity regarding the questions which parties temporary workers can be expected to support and what the underlying motives for party choice are. Synthesising arguments from both perspectives, the article proposes an alternative argument according to which temporary workers are expected to support the ‘new’ left – that is, green and other left-libertarian parties. It is argued that this party family combines redistributive policies with outsider-friendly policy design. Using individual-level data from the European Social Survey for 15 European countries, the article supports this argument by showing that temporary, compared to permanent, workers exhibit higher demand for redistribution and stronger support for the new left. Neither the risk-based nor the insider-outsider explanations receive full support. In particular, no signs of political disenchantment of temporary workers can be found. Thus, the findings challenge central claims of the insider-outsider literature.
This paper examines how flexible employment, particularly temporary and part-time employment, affect political support for social policy protection. Although their implications are a priori uncertain, the paper lays out how flexible employment conditions can be expected to generate various kinds of economic insecurity for workers that ought in turn to spur support for social-welfare policies. The paper finds broad support for such expectations in individual-level survey data from 15 EU member states. In particular, part-time employment, temporary employment and their combination tend to increase several measures of an individual’s subjective economic insecurity. Further, partly due to such increases, the same measures of flexible employment tend to spur support for social policy assistance targeted at the unemployed.
We present a theory of social policy preferences that emphasizes the composition of peopleÕs skills. The key to our argument is that individuals who have made risky investments in skills will demand insurance against the possible future loss of income from those investments. Because the transferability of skills is inversely related to their specificity, workers with specific skills face a potentially long spell of unemployment or a significant decline in income in the event of job loss. Workers deriving most of their income from specific skills therefore have strong incentives to support social policies that protect them against such uncertainty. This is not the case for general skills workers, for whom the costs of social protection weigh more prominently. We test the theory on public opinion data for eleven advanced democracies and suggest how differences in educational systems can help explain cross-national differences in the level of social protection.
Using the 2003 National Survey of College Graduates, I examine how immigrants perform relative to natives in activities likely to increase U.S. productivity, according to the type of visa on which they first entered the United States. Immigrants who first entered on a student/trainee visa or a temporary work visa have a large advantage over natives in wages, patenting, commercializing or licensing patents, and publishing. In general, this advantage is explained by immigrants' higher education and field of study, but this is not the case for publishing, and immigrants are more likely to start companies than natives with similar education. Immigrants without U.S. education and who arrived at older ages suffer a wage handicap, which offsets savings to the United States from their having completed more education abroad. Immigrants who entered with legal permanent residence do not outperform natives for any of the outcomes considered.
To comprehend how the welfare state adjusts to economic shocks it is important to get a handle on both the genesis of popular
preferences and the institutional incentives for governments to respond to these preferences. This paper attempts to do both,
using a general theoretical framework and detailed data at both the individual and national levels. In a first step, we focus
on how risk exposure and income are related to preferences for redistribution. To test our hypotheses, we extract detailed
risk-exposure measures from labour-force surveys and marry them to cross-national opinion survey data. Results from analysis
of these data attest to the great importance of risks within the labour market in shaping popular preferences for redistributive
efforts by governments. In a second step, we turn our attention to the supply side of government redistribution. Institutions,
we argue, mediate governments' reactions to redistributional demands following economic shocks. Using time-series cross-country
data, we demonstrate how national training systems, and electoral institutions, as well as partisanship, shape government
responses.
We apply an understanding of what computers do to study how computerization alters job skill demands. We argue that computer capital (1) substitutes for workers in performing cognitive and manual tasks that can be accomplished by following explicit rules; and (2) complements workers in performing nonroutine problem-solving and complex communications tasks. Provided these tasks are imperfect substitutes, our model implies measurable changes in the composition of job tasks, which we explore using representative data on task input for 1960 to 1998. We find that within industries, occupations and education groups, computerization is associated with reduced labor input of routine manual and routine cognitive tasks and increased labor input of nonroutine cognitive tasks. Translating task shifts into education demand, the model can explain sixty percent of the estimated relative demand shift favoring college labor during 1970 to 1998. Task changes within nominally identical occupations account for almost half of this impact.
I project the near-term future of work to ask whether job losses induced by artificial intelligence will increase the appeal of populist politics. The paper first explains how computers and machine learning automate workplace tasks. Automated tasks help to both create and eliminate jobs and I show why job elimination centres in blue-collar and clerical work-impacts similar to those of manufactured imports and offshored services. I sketch the near-term evolution of three technologies aimed at blue-collar and clerical occupations: autonomous long-distance trucks, automated customer service responses, and industrial robotics. I estimate that in the next 5-7 years, the jobs lost to each of these technologies will be modest but visible. I then outline the structure of populist politics. Populist surges are rare but a populist candidate who pits 'the people' (truck drivers, call centre operators, factory operatives) against 'the elite' (software developers, etc.) will be mining many of the US regional and education fault lines that were part of the 2016 presidential election.
We investigate the impact of globalization on electoral outcomes in 15 Western European countries over 1988–2007. We employ both official election results at the district level and individual‐level voting data, combined with party ideology scores from the Comparative Manifesto Project. We compute a region‐specific measure of exposure to Chinese imports, based on the historical industry specialization of each region. To identify the causal impact of the import shock, we instrument imports to Europe using Chinese imports to the United States. At the district level, a stronger import shock leads to (1) an increase in support for nationalist and isolationist parties, (2) an increase in support for radical‐right parties, and (3) a general shift to the right in the electorate. These results are confirmed by the analysis of individual‐level vote choices. In addition, we find evidence that voters respond to the shock in a sociotropic way.
The economic crisis has revealed the dark side of deregulation in the labour market: rising unemployment, limited access to social security and, due to low wages, no savings to count upon in bad times. This book casts light on the empirical relationship between labour market deregulation through non-standard contracts and the three main dimensions of worker security: employment, income and social security. Focusing on individual work histories, it looks at how labour market dynamics interact with the social protection system in bringing about inequality and insecurity. In this context Italy is put forward as the epitome of flexibility through non-standard work and compared with three similar countries: Germany, Spain and Japan. Results show that when flexibility is carried out as a mere cost-reduction device and social security only relies on insurance principles, deregulation leads to insecurity. 'The political economy of work security and flexibility' is essential reading for academics, students, practitioners and policy makers interested in the outcomes of labour market developments in advanced economies over the past twenty years.
This book serves as a sequel to two distinguished volumes on capitalism: Continuity and Change in Contemporary Capitalism (Cambridge, 1999) and Order and Conflict in Contemporary Capitalism (1985). Both volumes took stock of major economic challenges advanced industrial democracies faced, as well as the ways political and economic elites dealt with them. However, during the last decades, the structural environment of advanced capitalist democracies has undergone profound changes: sweeping deindustrialization, tertiarization of the employment structure, and demographic developments. This book provides a synthetic view, allowing the reader to grasp the nature of these structural transformations and their consequences in terms of the politics of change, policy outputs, and outcomes. In contrast to functionalist and structuralist approaches, the book advocates and contributes to a 'return of electoral and coalitional politics' to political economy research.
We study the effects of industrial robots on US labor markets. We showtheoretically that robots may reduce employment and wages and thattheir local impacts can be estimated using variation in exposure to ro-bots—defined from industry-level advances in robotics and local indus-try employment. We estimate robust negative effects of robots on em-ployment and wages across commuting zones. We also show that areasmost exposed to robots after 1990 do not exhibit any differential trendsbefore then, and robots’impact is distinct from other capital and tech-nologies. One more robot per thousand workers reduces the employment-to-population ratio by 0.2 percentage points and wages by 0.42%.
Recent research has established that employment risk shapes social policy preferences. However, risk is often conceptualized as an alternative measure of the socio-economic status. We show that employment risk and socio-economic status are distinct, crosscutting determinants of social policy preferences. More specifically, we analyze the policy preferences of high-skilled labor market outsiders as a cross-pressured group. We first establish that labor market vulnerability has spread well into the more highly educated segments of the population. We then show that the effect of labor market vulnerability on social policy preferences even increases with higher educational attainment. We conclude that that labor market risk and educational status are not interchangeable and that the high skilled are particularly sensitive to the experience of labor market risk. Thereby, our findings point to a potential cross-class alliance between more highly and lower skilled vulnerable individuals in support of a redistributive and activating welfare state. Thus, they have far-reaching implications for our understanding of both the politicization of insider/outsider divides and the politics of welfare support.
This chapter develops three arguments. First, in line with much of the recent literature, that policy reforms of the 'new welfare state' in Europe imply several dimensions of new and old social policy instruments. Second, that the conflict lines which divide supporters and opponents of these 'old' and 'new' reforms are cross-cutting, because 'old' and 'new' policies affect different social groups in different ways. And third, that the ensuing complexity and multidimensionality of reform politics in Europe make the 'politics of the new welfare state' contingent, variable and difficult to predict. Empirically, the chapter substantiates these three arguments with examples of continental family policy reforms.
Technological change is widely considered to be a key driver of the economic and occupational structure of affluent countries. Current advances in information technology have led to significant substitution of routine work by capital, whilst occupations with abstract or interpersonal manual task structures are complemented or unaffected. We develop a simple theoretical framework in which individuals in routine task intensive occupations prefer public insurance against the increased risk of future income loss resulting from automation. Moreover, we contend that this relation will be stronger for persons employed in sectors particularly exposed to technological change, and for richer individuals who have more to lose from automation. In this way we combine occupational and sectoral elements of risk exposure, whilst we revisit the role of income in shaping redistribution preferences. The implications of our theoretical framework are tested using survey data for 23 European countries between 2002 and 2012.
How does labour market disadvantage translate into political behaviour? Bringing together the literatures on political alienation,
redistribution preferences and insider-outsider politics, we identify three mechanisms by which labour market disadvantages
influence voting behaviour. Disadvantages can increase support for redistribution, reduce internal political efficacy or lower
external political efficacy. This translates into support for pro-redistribution parties, vote abstention or support for protest
parties. Using the Dutch LISS survey, we observe a twin effect of increased support for redistribution and decreased external
efficacy. Mediated through redistributive preferences, we find a positive effect of labour market disadvantage on voting for
left parties. Mediated through external efficacy we find a positive effect of labour market disadvantage on protest voting.
In contrast, we do not find any effect of labour market disadvantage on internal efficacy. Hence, the observed effect of labour
market disadvantage on political abstention is entirely mediated by external efficacy.
We examine how susceptible jobs are to computerisation. To assess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupations probability of computerisation, wages and educational attainment.
Political preferences are multi-dimensional, covering topics like redistribution, immigration, and abortion. But what accounts for people’s political preferences? We argue that an individual’s work experiences on the job play an important part in shaping attitudes. In a process of generalization and transposition, people apply the kinds of reasoning, heuristics, and problem-solving techniques they learn and use at work in all realms of life. In this article, we briefly discuss the dimensionality of the political preference space and then explicate our account that links work experiences with attitudes. We use European Social Survey data to establish correlations between work experiences and attitudes and find evidence that is consistent with our account.
This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993–2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within-industry and between-industry components.
With the post-industrialization and flexibilization of European labour markets, research on social and economic correlates of labour market vulnerability and weak labour market attachment is growing. Part of this literature conceptualizes these correlates in terms of dualization and insider–outsider divides in an attempt to explore their political implications: this article is written in order to contribute to this strand of research. In this article, we propose a conceptualization and measurement of labour market insiders and outsiders, based on their respective risk of being atypically employed or unemployed. We propose both a dichotomous measure of insiders/outsiders and a continuous measure of the degree of an individual’s ‘outsiderness’. We argue that such risk-based measures are particularly suited for research on the policy preferences and political implications of insider–outsider divides. On the basis of EU-SILC and national household panel data, we provide a map of dualization across different countries and welfare regimes. We then explore the correlates of labour market vulnerability – that is, outsiderness – by relating it to indicators of income and upward job mobility, as well as labour market policy preferences. The results consistently confirm an impact of labour market vulnerability, indicating a potential for a politicization of the insider/outsider conflict.
Are party preferences of atypical workers distinct from those in stable employment? The welfare state literature debates this question, but very few empirical studies have been conducted. We examine the German case, being an example of a welfare state with strong social insurance traditions where the rise of atypical employment has been conspicuous. In particular, we test the argument that preferences of labour market outsiders may not differ because outsiders share households with insiders. We find that labour market status significantly affects party preferences. Compared with standard employees, atypical workers have stronger preferences for small left-wing parties. Living together with a labour market insider neutralizes these party preferences, but this type of household is not very common. Moreover, atypical workers differ from the unemployed by not participating less in elections than insiders. Therefore, it is expedient to distinguish between different types of labour market outsiders.
The economics and elections connection has been heavily investigated, although mostly through single-country studies. The first comparative, survey-based research on economic voting, by Lewis–Beck, found serious effects. Subsequently, other comparative scholars have explored this terrain. The most recent, and most ambitious, examinations are by Duch and Stevenson and by van der Brug et al. These impressive efforts arrive at opposing conclusions about the importance of economic voting. We carry out another major examination, with an eye to reconciling these differences. A carefully specified model of vote choice is estimated on a balanced survey pool (N > 40,000) from 10 Western European nations. Special pains are taken with issues of economic measurement, estimation, and endogeneity. The finding is that economic perceptions are formed from economic reality, and importantly influence vote choice. Besides enhancing our understanding of comparative political behavior, the strong result speaks to the functioning of government accountability in advanced democracies.
Much of the disagreement in the debate about globalization and its present or absent effects on the welfare state stems from competing assumptions about the individual-level determinants of redistributional preferences. This article calls for and provides testing of these causal mechanisms at the individual level. Traditional accounts suggest that risks at the industry level are important determinants of redistributional preferences. This article argues that risks at the occupational level should also be considered. A comprehensive new data set is used to test whether and what types of risks in the labor market play an important role in shaping preferences. Statistical analyses of public opinion surveys (European Social Survey) show strong evidence for the assumed causal mechanism. Contrary to much of the literature, but in line with this article's claims, it is the occupational, rather than the industry level, that is most important. The article lays out implications of these findings.
We analyze the effect of rising Chinese import competition between 1990 and 2007 on local U.S. labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization while instrumenting for imports using changes in Chinese imports by industry to other high-income countries. Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in exposed labor markets.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Why are unemployment benefits more generous in some countries? This article argues that citizens trade off the redistributive and insuring effect of social insurance. As a result, the distribution of risk in a society has important consequences via popular demand for social policy-making. At the microlevel, the article shows that, in addition to income, the risk of unemployment is a key predictor of individual-level preferences for unemployment benefits. Based on the microlevel findings, the article argues that at the macrolevel the homogeneity of the risk pool is an important determinant of benefit generosity: the more equally unemployment risk is distributed, the higher unemployment replacement rates are. Empirical testing at both levels finds support for this account of social policy by popular demand.
The analysis in this book disputes entrenched interpretations of the comparative political economy of industrialized democracies. It questions, in particular, the widely-held assumption that social democratic governments will defend the interests of labor. The evidence shows that labor has become split into two clearly differentiated constituencies: those with secure employment (insiders) and those without (outsiders). The book focuses on three policy areas: employment protection (representing the main concern of insiders), and active and passive labor market policies (the main concern of outsiders). The main thrust of the argument is that the goals of social democratic parties are often best served by pursuing policies that benefit only insiders. The implication of the book's insider-outsider model is that social democratic government is associated with higher levels of employment protection legislation but not with labor market policy. The book also argues that there are factors can reduce insider-outsider differences and weaken their influence on social democratic governments. These hypotheses are explored through the triangulation of different methodologies. The book provides an analysis of surveys and macrodata, and a detailed comparison of three case-studies: Spain, the UK and the Netherlands. Its reinterpretation of the challenges facing social democracy will represent a significant contribution to the comparative politics and political economy literatures.
A central organizing framework of the voluminous recent literature studying changes in the returns to skills and the evolution of earnings inequality is what we refer to as the canonical model, which elegantly and powerfully operationalizes the supply and demand for skills by assuming two distinct skill groups that perform two different and imperfectly substitutable tasks or produce two imperfectly substitutable goods. Technology is assumed to take a factor-augmenting form, which, by complementing either high or low skill workers, can generate skill biased demand shifts. In this paper, we argue that despite its notable successes, the canonical model is largely silent on a number of central empirical developments of the last three decades, including: (1) significant declines in real wages of low skill workers, particularly low skill males; (2) non-monotone changes in wages at different parts of the earnings distribution during different decades; (3) broad-based increases in employment in high skill and low skill occupations relative to middle skilled occupations (i.e., job 'polarization'); (4) rapid diffusion of new technologies that directly substitute capital for labor in tasks previously performed by moderately-skilled workers; and (5) expanding offshoring opportunities, enabled by technology, which allow foreign labor to substitute for domestic workers in specific tasks. Motivated by these patterns, we argue that it is valuable to consider a richer framework for analyzing how recent changes in the earnings and employment distribution in the United States and other advanced economies are shaped by the interactions among worker skills, job tasks, evolving technologies, and shifting trading opportunities. We propose a tractable task-based model in which the assignment of skills to tasks is endogenous and technical change may involve the substitution of machines for certain tasks previously performed by labor. We further consider how the evolution of technology in th
This paper shows that the United Kingdom since 1975 has exhibited a pattern of job polarization with rises in employment shares in the highest- and lowest-wage occupations. This is not entirely consistent with the idea of skill-biased technical change as a hypothesis about the impact of technology on the labor market. We argue that the "routinization" hypothesis recently proposed by Autor, Levy, and Murnane (2003) is a better explanation of job polarization, though other factors may also be important. We show that job polarization can explain one-third of the rise in the log(50/10) wage differential and one-half of the rise in the log(90/50). Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
U.S. educational and occupational wage differentials were exceptionally high at the dawn of the twentieth century and then decreased in several stages over the next eight decades. But starting in the early 1980s the labor market premium to skill rose sharply and by 2005 the college wage premium was back at its 1915 level. The twentieth century contains two inequality tales: one declining and one rising. We use a supply-demand-institutions framework to understand the factors that produced these changes from 1890 to 2005. We find that strong secular growth in the relative demand for more educated workers combined with fluctuations in the growth of relative skill supplies go far to explain the long-run evolution of U.S. educational wage differentials. An increase in the rate of growth of the relative supply of skills associated with the high school movement starting around 1910 played a key role in narrowing educational wage differentials from 1915 to 1980. The slowdown in the growth of the relative supply of college workers starting around 1980 was a major reason for the surge in the college wage premium from 1980 to 2005. Institutional factors were important at various junctures, especially during the 1940s and the late 1970s.
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Routine Tasks and the Dynamics of Italian employment
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Why Italy's Insular Election Is More Important Than It Looks
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Are Social Democratic Parties Insider Parties? Electoral Strategies of Social Democratic Parties in Western Europe in the Age of Dualization
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Social Policies and the Impact of Social Group Insecurity on Far Right Party Support in Europe
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