The Race between Technology and Woman: Changes in Relative Wages and Labor Shares in OECD Countries

TL;DR

This paper develops a framework to analyze how technological change impacts wages and income shares across genders and skill levels in OECD countries, revealing significant effects of ICT advances on wage gaps and labor shares.

Contribution

It introduces a unified model linking technological change to wage and income share dynamics, with empirical estimates across OECD countries.

Findings

ICT advances narrow gender wage gaps

ICT advances widen skill wage gaps

Labor shares decline with technological progress

Abstract

The era of technological change entails complex patterns of changes in wages and employment. We develop a unified framework to evaluate the effects of capital-embodied technological change on, as well as the contributions of factor inputs to, the relative wages and income shares of different types of labor. We obtain the aggregate elasticities of substitution among different types of capital and labor by estimating and aggregating sectoral production function parameters with cross-country cross-industry panel data from OECD countries. We show that advances in information, communication, and computation technologies contribute significantly to narrowing the gender wage gap, widening the skill wage gap, and declining labor shares.