Non-Routine Tasks, Restructuring of Firms, and Wage Inequality within and between Skill-Groups

37 Pages Posted: 27 Feb 2004

See all articles by Hartmut Egger

Hartmut Egger

University of Zurich - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Volker Grossmann

University of Fribourg - Faculty of Economics and Social Science; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 2004

Abstract

This paper argues that endogenous restructuring processes within firms towards non-routine tasks like autonomous problem-solving and other analytical activities, triggered by advances in information and communication technologies (ICT) and rising supply of educated workers, are associated with an increase of wage inequality within education groups, possibly accompanied by a decline or stagnation of between-group wage dispersion. The mechanisms proposed in this research are not only consistent with the evolution of the distribution of wages in advanced countries, but also the evolution of workforce composition in firms and a frequently confirmed complementarity between skill-upgrading, new technologies and knowledge-based work organization.

Keywords: Non-routine tasks, Skill supply, Technological progress, Unobserved abilities, Within-group wage inequality

JEL Classification: D20, J31

Suggested Citation

Egger, Hartmut and Grossmann, Volker, Non-Routine Tasks, Restructuring of Firms, and Wage Inequality within and between Skill-Groups (February 2004). Available at SSRN: https://ssrn.com/abstract=508565 or http://dx.doi.org/10.2139/ssrn.508565

Hartmut Egger

University of Zurich - Department of Economics ( email )

Zürichbergstrasse 14
CH-8032 Zurich
Switzerland

HOME PAGE: http://www.wwi.unizh.ch/staff/egger/index.php

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Volker Grossmann (Contact Author)

University of Fribourg - Faculty of Economics and Social Science ( email )

Fribourg, CH 1700
Switzerland

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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