Tarek Hassan (Alesina Seminar)

See the seminar's full schedule here: Alberto Alesina Seminar on Political Economy

Today's Speaker

Tarek Alexander Hassan (Boston University), "New Technologies and Inequality" (w/Aakash Kalyani and Pascual Restrepo)

Abstract

We show that the creation and introduction of new technologies in the workplace is a key driver of economic inequality over time, across space, and skill levels. It develops a model where college-educated workers learn how to use new technologies faster than others, and where this advantage dissipates over time as technologies become standardized and easier to use. In equilibrium, the college wage premium is determined by the interplay between the pace of technology creation and standardization. A heightened pace of technology creation causes a long-lasting increase in the college premium. The model can be calibrated using novel text-based data on new technologies and their changing demand for skills as they age. These data show that new technologies initially require more college-educated workers but see a reversal as they age. The data also point to an increased rate of new technology creation starting in the 1980s and tapering off in the 2000s. In response to this measured acceleration in the pace of technology creation, the model generates a 25 log point increase in the college premium that begins to revert in the 2010s. In extensions, we allow new technologies to diffuse from dense to lower-density cities, and younger workers to have a comparative advantage in new technologies. These extensions explain why the increase in the college premium was mainly an urban phenomenon and why it had a marked age pattern, rising first for young workers and then for older workers. 

Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.

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See the seminar's full schedule at the Alesina Seminar page.

All interested faculty and students are invited to attend.