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  • 2020
  • Working Paper
  • HBS Working Paper Series

Digital Labor Market Inequality and the Decline of IT Exceptionalism

By: Ruiqing Cao and Shane Greenstein
  • Format:Print
  • | Language:English
  • | Pages:70 
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Abstract

Several decades of expansion in digital communications, web commerce, and online distribution have altered the U.S. labor market for IT workers. We characterize the shifts in regional IT labor markets from 2000 to 2018, and find that IT wage growth did not follow an exceptional pattern compared to broader STEM labor market trends. Digital wage inequality increased, almost entirely due to rising local premiums in a few urban metropolises, where wage spreads became narrower than elsewhere. The supply of college-educated workers accounted for a substantial share of the total wage difference between IT labor markets in top locations and other cities. Agglomeration and IT innovation explained a notably larger fraction of the top-location wage premium in more recent years.

Keywords

Information Technology; Labor; Wages; Equality And Inequality

Citation

Cao, Ruiqing, and Shane Greenstein. "Digital Labor Market Inequality and the Decline of IT Exceptionalism." Harvard Business School Working Paper, No. 21-019, August 2020. (NBER Working Paper Series, No. 21-015, August 2020.)
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About The Author

Shane M. Greenstein

Technology and Operations Management
→More Publications

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More from the Authors
  • IBM Watson at MD Anderson Cancer Center By: Shane Greenstein, Mel Martin and Sarkis Agaian
  • Biased Sampling of Early Users and the Direction of Startup Innovation By: Ruiqing Cao, Rembrand Koning and Ramana Nanda
  • Where the Cloud Rests: The Economic Geography of Data Centers By: Shane Greenstein and Tommy Pan Fang
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