Essays on Inequality, Automation and Globalisation

The surge of automation technologies and globalisation is fuelling concerns about their potential to cause the disappearance of many traditional jobs and exacerbate disparities. Relatedly, the joint contribution of trade wars, higher robotisation and the ongoing COVID-19 pandemic is exerting additional pressure upon a complete rearrangement of productive activities and spurring an increasingly intense debate. Despite the growing interest, however, the empirical evidence on these topics is far from conclusive. The present Ph.D. dissertation is aimed at contributing to the current debate with three empirical works, tackling the inequality issue. Specifically, Chapter 1 deals with the determinants of income inequality, relying on a panel of 90 advanced and emerging economies, with data spanning the years 1970-2015. Results show that technology and globalisation are nonlinearly correlated with inequality, depicting U-shaped and inverted U-shaped relationships, respectively. The evidence suggests that these inequality determinants produce opposite effects, depending on threshold values and levels of economic development. Chapter 2 assesses the impact of advances in robotics, intangible technologies and globalisation on relative wages, following the skill-biased technical change and polarisation of the labour force frameworks. The analysis is performed on data for a panel of 18 mostly European economies and 6 industries over 2008-2017. Main results indicate that intangible technologies and globalisation measures either benefit high-skilled workers or give rise to polarising effects. Finally, Chapter 3 investigates the existence of robotic capital-skill complementarity, according, among others, to the race between education and technology. Relying on a constructed measure of robotic capital stock, we test the hypothesis of a lower elasticity of substitution between robotic capital and skilled labour. The study is carried out using two OECD country-sector samples and different frameworks, with results pointing to a higher complementarity between robotic capital and skilled labour. Furthermore, we find evidence that robotic and ICT capital equipment produce polarising effects. In essence, the present work sheds further light on the relevance of automation technologies and globalisation as powerful forces in shaping inequalities. As such, policymakers are called to set suitable measures to address the struggles that workers will face.