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The wider impacts of high-technology employment

Kemeny, Thomas and Osman, Taner (2017) The wider impacts of high-technology employment. Working Paper (16). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

Innovative, high-technology industries are commonly described as drivers of regional development. ‘Tech’ workers earn high wages, but they allegedly generate knock-on effects throughout the local economies that host them, producing new jobs and raising wages in nontradable activities. At the same time, in iconic high-tech agglomerations like the San Francisco Bay Area, the home of Silicon Valley, the success of the tech industry creates tensions, in part as living costs rise beyond the reach of many non-tech workers. Across a large sample of US cities, this paper explores these issues systematically. Combining annual data on wages, employment and prices from the Quarterly Census of Employment and Wages, the Department of Housing and Urban Development and the Consumer Price Index, it estimates how growth in tradable tech employment affects the real, living-cost deflated wages of local workers in nontradable sectors. Results indicate that high-technology employment has significant, positive, but substantively modest effects on the real wages of workers in nontradable sectors. However, in cities with highly price-inelastic housing markets, the relationship is inverted, with tech generating negative externalities for nontradable workers.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/International-Inequalities
Additional Information: © 2017 The Authors
Divisions: International Inequalities Institute
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: 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.
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: 04 Oct 2019 14:06
Last Modified: 22 Nov 2019 15:33
URI: http://eprints.lse.ac.uk/id/eprint/101854

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