The impact of within-occupation technological change on spatial sorting and wage inequality

Both the demand for skilled labor and the skill wage premium have become increasingly dispersed across the United States. This paper examines how technological change within occupations drives these uneven local developments. Combining a novel measure of technological change-capturing shifts in task intensities within 430 detailed occupations-with patent data and microdata, I demonstrate that innovation reallocates labor toward cognitiveintensive tasks, especially in densely populated areas. Motivated by this, I show that greater exposure to technological change increases the relative employment of college-educated workers while causing within-occupation wage declines for less-educated workers, widening the college wage premium.