Working Paper: CEPR ID: DP9455
Authors: Dennis Grlich; Dennis J. Snower
Abstract: This paper sheds light on how changes in the organization of work can help to understand increasing wage inequality. We present a theoretical model in which workers with a wider span of competence (higher level of multitasking) earn a wage premium. Since abilities and opportunities to expand the span of competence are distributed unequally among workers across and within education groups, our theory helps to explain (1) rising wage inequality between groups, and (2) rising wage inequality within groups. Under certain assumptions, it also helps to explain (3) the polarization of the income distribution. Using a rich German data set covering a 20-year period from 1986 to 2006, we provide empirical support for our model.
Keywords: multitasking; organizational change; tasks; wage inequality
JEL Codes: J24; J31; L23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological innovations (O39) | Increase in the span of competence among workers (J24) |
| Increase in the span of competence among workers (J24) | Multitasking premium (Y90) |
| Technological innovations (O39) | Multitasking premium (Y90) |
| Higher-skilled workers productivity rises relative to lower-skilled workers (J24) | Wage inequality (J31) |
| Widening gap in multitasking abilities between higher-educated and lower-educated workers (D29) | Rising wage inequality (J31) |
| Multitasking premium (Y90) | Higher wages (J39) |