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Technical change and superstar effects: evidence from the roll-out of television

Konig, Felix Nikolaus (2019) Technical change and superstar effects: evidence from the roll-out of television. CEP Discussion Papers (CEPDP1663). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Technical change that improves economies of scale can generate fast income growth among top earners at the expense of everyone else. I test this classic “superstar model” in the labor market for entertainers where the historic roll-out of television led to a natural experiment in scale-related technological change. The launch of a local TV station multiplied audiences of top entertainers nearly fourfold and resulted in a 50% increase of the top percentile’s income share, a more right-skewed income distribution, and significant income losses for lower ranked entertainers. The results confirm the predictions of the “superstar model” and are at odds with canonical models of skill-biased technological change.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2019 The Author(s)
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
Date Deposited: 17 Feb 2020 12:42
Last Modified: 16 May 2024 12:18

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