Worker adjustment in the digital age

Abstract

Income inequality has been rising in many advanced economies over the past four decades. However, the underlying sources of rising income inequality are still not fully understood. For this reason, this dissertation investigates two drivers of rising income inequality: digital technologies and the role of firms. I conduct four empirical studies focusing on two drivers of rising earnings inequality. The first half of the dissertation contributes to the large strand of literature investigating the impact of digital technologies on the labor market. Previous research mainly focused on economy-wide outcomes of digital technologies, however less is known about the impact on individual workers. Who are the workers that win and who are the workers that lose from digital technologies? How do the wages of college-educated workers develop in technology-intensive careers? The second half of the dissertation contributes to the research on the role of firms in rising earnings inequality. Here, I examine the role of firm-specific technology in firm wage premiums and the rise in high-wage workers sorting to high-wage firms. In addition, I quantify the wage-setting power of firms in the Netherlands.