IDEAS home Printed from https://ideas.repec.org/a/fau/fauart/v71y2021i3p203-219.html
   My bibliography  Save this article

Automation, Digitalization, and Income Inequality in Europe

Author

Listed:
  • Pauline Fiedler

    (Zeppelin University of Friedrichshafen, Germany)

  • Jarko Fidrmuc

    (Zeppelin University Friedrichshafen, Friedrichshafen, Germany
    Mendel University, Brno, Czech Republic)

  • Fabian Reck

    (Zeppelin University of Friedrichshafen, Germany)

Abstract

We analyze the impact of industrial robots as well as investment in computing equipment and digital technologies on different indicators of income distributions. Our data covers selected West European EU economies from 2004 to 2017. We try to shed light on the underlying dynamics of technological advances on inequality. The results suggest that robot density is associated positively with income inequality, while no robust evidence is found for the computing equipment and digital technologies. In particular, the income shares of the bottom 20 and 50 percent decreases with automation, while the income shares of the top 10 and 1 percent increases, which supports the job and wage polarization hypothesis. This is especially important for policy formulations after the pandemic, because current rapid automation efforts can potentially have significant long-term implications for the labor market.

Suggested Citation

  • Pauline Fiedler & Jarko Fidrmuc & Fabian Reck, 2021. "Automation, Digitalization, and Income Inequality in Europe," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 71(3), pages 203-219, November.
    • Handle: RePEc:fau:fauart:v:71:y:2021:i:3:p:203-219
    as

    Download full text from publisher

    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1486
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    automation; robots; digitalization; inequality; polarization hypothesis;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:71:y:2021:i:3:p:203-219. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalie Svarcova (email available below). General contact details of provider: https://edirc.repec.org/data/icunicz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.