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Do low-skilled workers gain from high-tech employment growth? High-technology multipliers, employment and wages in Britain

Lee, Neil and Clarke, Stephen (2019) Do low-skilled workers gain from high-tech employment growth? High-technology multipliers, employment and wages in Britain. Research Policy, 48 (9). ISSN 0048-7333

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Identification Number: 10.1016/j.respol.2019.05.012

Abstract

Do low-skilled workers benefit from the growth of high-technology industries in their local economy? Policymakers invest considerable resources in attracting and developing innovative, high-tech industries, but there is relatively little evidence on the distribution of the benefits. This paper investigates the labour market impact of high-tech growth on low and mid-skilled workers, using data on UK local labour markets from 2009-2015. It shows that high-tech industries – either STEM-intensive ‘high-tech’ or digital economy – have a positive jobs multiplier, with each 10 new high-tech jobs creating around 7 local non-tradeable service jobs, around 6 of which go to low-skilled workers. Employment rates for mid-skilled workers do not increase, but they benefit from higher wages. Yet while low-skilled workers gain from higher employment rates, the jobs are often poorly paid service work, so average wages fall, particularly when increased housing costs are considered.

Item Type: Article
Official URL: https://www.journals.elsevier.com/research-policy
Additional Information: © 2019 Elsevier B.V.
Divisions: Geography & Environment
Subjects: H Social Sciences > HD Industries. Land use. Labor
T Technology > T Technology (General)
H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J21 - Labor Force and Employment, Size, and Structure
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services; Computer Software
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
Date Deposited: 03 Jun 2019 13:54
Last Modified: 20 Nov 2019 12:32
URI: http://eprints.lse.ac.uk/id/eprint/100926

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