The effects of technological change on labor markets: College wage premium in Europe

Abstract

Technology has affected the demand for skills and disrupted labor markets . In particular, the evidence suggests that technological change has led to job polarization by increasing the demand for high- and low-wage occupations at the expense of medium-wage occupations. This thesis builds on the hypothesis that different types of technologies can affect the evolution of skill premium differently. More specifically, it explores the effects of different types of technological capital on skill premium in 17 European countries from 2008 to 2017. Research on this topic is less abundant in Europe than in the US and usually utilizes older databases. The contribution of this study is the analysis of the skill premium with updated information and various types of technological capital. The results show that intangible assets have positive and statistically significant effect on skill premium. IT complements high-educated workers in retail, transportation, construction and health industries and CT substitutes high-educated workers in transportation, construction and in public administration industries. Moreover, this thesis explores a comparison of these with previous literature and presents an explanation for the differences and similarities with the results.