Technological Change, Firm Heterogeneity and Wage Inequality

De-routinization in the Fourth Industrial Revolution – Firm-Level Evidence

“…In fact, Cortes et al (2023) combine a Melitz (2003) type model with skills and task-biased technological change (TBTC) and find that task changes differ in intensity also within the group of adopters depending on their size and productivity. This view is also in line with Battisti et al (2023) who find that the combination of technologies with organizational change is associated with changes in tasks.…”

“…Moreover, the implications of technology adoption for the aggregate occupational composition remain unclear as existing studies on the effects of technology adoption tend to focus on structural shifts within firms (Gaggl and Wright, 2017;Aghion et al, 2020). Yet, whether aggregate-level de-routinization stems from the displacement of routine jobs within firms adopting frontier technologies, or from differential trends in employment growth or de-routinization among heterogeneous firms, comes with different implications for the routine-replacing character of frontier technologies and related between-firm heterogeneity (Barth et al, 2016;Song et al, 2019;Cortes et al, 2023). As Seamans and Raj (2019) have pointed out, a significant challenge to investigating these issues is the lack of sufficient firm-level data with information on the adoption of frontier technology.…”

“…Other research argues that technological change leads to higher employment concentration in more productive firms and an increase in between-firm wage inequality (Cortes et al, 2023).…”