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Market Disruption and Inequality: How Computerization and the Transition to Capitalism affect Wage and Gender Differentials

Abstract

This dissertation examines how two common types of market disruptions, technology-induced and government-induced disruptions, influence inequality. Specifically, it investigates how the spread of computers and the transition to capitalism are related to wage differentials and gender earnings differentials, respectively. Compared to prior work, this dissertation focuses particularly on how these disruptions influence inequality in heterogeneous ways across birth cohorts as well as between and within work establishments, using unconditional quantile regression and fixed effects regression. Results suggest that the spread of computers was related to greater inequality among older cohorts across the wage distribution in (West) Germany over time. Whereas computerization appears to have affected older cohorts more strongly, market transformation in Slovenia coincided with a greater rise in gender earnings inequality and changes to the organization of gender inequality in the labor market among younger cohorts. Furthermore, although results provide little indication of a causal effect of computers on establishment-level inequality, computer investments tend to be higher in workplaces with greater heterogeneity in pay. Investments in computer technologies may also slightly contribute to between-establishment inequality in the long term, while appearing to have no long-term influence on within-establishment inequality. Overall, this dissertation highlights how disruptions shape inequality in nuanced ways and that cohorts and workplaces represent important structural boundaries that determine this effect.

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