We analyze the effects of automation on the wages of high-skilled and low-skilled workers and thereby on the evolution of wage inequality. Our model explains the simultaneous presence of i) increasing per capita income, ii) declining real wages of low-skilled workers, and iii) an increasing...

We analyze the effects of automation on the wages of high-skilled and low-skilled workers and thereby on the evolution of wage inequality. Our model explains the simultaneous presence of i) increasing per capita income, ii) declining real wages of low-skilled workers, and iii) an increasing...