About the project
Technological change has been a key driver of economic growth and prosperity over the past century. It has also played an important role in increasing income inequality by rendering certain jobs and skills redundant in the labour market. Since the mid-1930s, the Nordic countries have experienced an unusual combination of high productivity growth, coupled with relatively low levels of inequality. Can the Nordic success story of high productivity growth continue? To some observers the high growth rates have been surprising as labour market institutions are characterised by strong unions, comprehensive collective bargaining, small wage differentials and generous social protection. To explain this puzzle and help design policies that both foster firm innovation and alleviate inequality, we need to better understand the links between technological change, income distribution and labour market institutions. This project contributes to such an understanding by studying: (1) how, and to what extent, changes in the cost of labour affect productivity, and thereby also economic growth, (2) how labour market institutions matter for the distribution of gains from technological change. Using unique data sources, in combination with apply state of the art methodological and empirical methods, the project contributes to bridging two major research agendas in the field of economics: understanding the causes and consequences of firm technological change, and understanding the increasing importance of firms in contributing to increased inequality .Knowledge about the type of skills and tasks that are complementary to firm technological change can form the basis for policy advice on how to increase the pay-off for workers that are presently not reaping the gains of technical change. The project will also shed new light on the implications of firm technological change for the gender employment and wage gap, which can help shape policies to reduce gender inequality in the labour market.
