2019/03/12 by David Hope, Angelo Martelli · 4 citations
Economics, Econometrics and Finance · Social Sciences · #Labor Movements and Unions #Labor market dynamics and wage inequality #Social Policy and Reform Studies
paper · doi:10.1017/s0043887118000333
openalex publication_date 2019/03/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23
Abstract The transition from Fordism to the knowledge economy in the world’s advanced democracies was underpinned by the revolution in information and communications technology ( ict ). The introduction and rapid diffusion of ict pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their own talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; income in the Anglo-Saxon countries remains particularly unequally distributed. To shed new light on this puzzle, the authors carry out a panel data analysis of eighteen oecd countries between 1970 and 2007. Their analysis stands apart from the existing empirical literature by taking a comparative perspective. The article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions. The authors find that the expansion of knowledge employment is positively associated with both the 90/10 wage ratio and the income share of the top 1 percent, but that these effects are mitigated by the presence of strong labor market institutions, such as coordinated wage bargaining, strict employment protection legislation, high union density, and high collective bargaining coverage. The authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy.