CReAM Brown Bag seminar presented by Matthias Parey (University of Surrey and IFS)

Abstract: This paper provides new evidence on the effect of innovation on employment and wage outcomes for workers in the US over the period 1980-2016. For this purpose, the paper develops a task-based view of innovation, using a text analysis approach based on information from patents. I then study the labor market effects of innovation. I find that employment among low-skill occupations declines in response to innovation. At the same time, high-skill occupations experience significant wage increases, and these are found to be particularly pronounced among professional workers. The results suggest that technological advances play an important role in driving increases in inequality observed over recent decades.

Paper to follow