The impact of new technologies on intergenerational mobility

This project aims to analyze the impact of new technologies on social mobility in European Union countries. Specifically, it seeks to determine whether the increasing use of computers promotes equality of opportunity in the labour market or exacerbates existing inequalities. We will focus on how computer technologies influence wages and career advancement opportunities for individuals from families with different levels of social capital.

By examining the effects of computerization across different industries and occupations, we will identify who benefits most from technological advancements and who may face a deterioration in their professional prospects. The findings will provide valuable insights into the potential consequences of emerging technologies, such as large language models (e.g., ChatGPT), for European labour markets.

The project will address two key research questions:

1. How do computer technologies affect workers’ wages in EU countries?
2. How do computer technologies influence the wage gap between individuals from families with different levels of parental education?

We will use data from the European Union Statistics on Income and Living Conditions (EU-SILC) to answer these questions. The analysis will employ the instrumental variables estimation method, which will allow for a more precise measurement of the impact of digital technologies on wages both within and across occupations.

The frequency of computer use in the workplace will serve as a proxy for technology adoption. To capture technology’s causal effect on wages, we will develop a computer technology exposure instrument by integrating job task measures from the O*NET database, which serve as strong predictors of computer adoption in the workplace. Additionally, we will leverage cross-country variations in the adoption of computer technologies to construct a shift-share instrument, ensuring the robustness of the results.

Understanding the impact of technology on social mobility is essential for shaping effective public policies. Social mobility has profound political and economic implications. Low mobility often reinforces “zero-sum thinking,” the belief that one group’s gains necessarily come at another’s expense. This perception can drive support for policies such as restrictive migration laws or aggressive income redistribution, regardless of political affiliation.

From an economic perspective, higher social mobility fosters economic growth and innovation. Moreover, disparities in opportunity within one generation can perpetuate wealth and income inequality in subsequent generations. Given the rapid pace of technological change, understanding these dynamics is crucial for developing policies that promote equal labour market opportunities across Europe.

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Project funded by the National Science Center.
Contract no: UMO-2024/53/N/HS4/01750.
Project no: 2024/53/N/HS4/01750