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In the research paper “The digital service economy as a source of intraregional wage inequalities” Roberta Capello, Camilla Lenzi and Elisa Panzera analyse how three models of the digital service economy – the product-service economy, sharing economy and online service model – affect wage disparities within European regions.

 

 

Each of these models has specific characteristics. The product-service economy entails a strategy wherebymanufacturers offer their customers not only products but also various services, such as training or consultancy. Meanwhile, the sharing economy is based on the creation of new online markets for underutilised assets (e.g. a spare seat in a car, a spare bedroom, spare time) which are made temporarily accessible to other users upon payment based on a peer-to-peer exchange (BlaBlaCar, TaskRabbit, Airbnb). Finally, the online service economy involves digital platforms providing services, products or content (e.g. mobility solutions, food delivery services, payment) without owning the necessary assets. This value creation model rests on the dematerialisation of assets or products, enabled by the unbundling of products from the service a product can provide (Deliveroo, Uber).

 

“Popular fears that the diffusion of the new technologies will increase inequalities are not fully misplaced. However, regions are not similarly exposed to these risks, and only some of them are experiencing a widening of wage inequality conditions,” says Roberta Capello, professor at the Politecnico Di Milano.

 

She and her co-authors analysed data on innovations and wages from 164 regions between 2009 and 2016 and found that a noticeable widening of wage inequalities took place in regions where digital service economy models were fully developed and co-occurred. When only one model prevailed, its impact on wage disparities was limited.

 

“Our findings suggest that in regions with a fully developed digital service economy pattern, or in those where sharing economy is dominant, policymakers should focus on interventions,” says Camilla Lenzi.

 

Capello, R., Lenzi, C., & Panzera, E. (2023). “The digital service economy as a source of intraregional wage inequalities” (Deliverable 4.7). Leuven: UNTANGLED project 1001004776 – H2020.

 

The paper is available here.

The February 14 meet-up organised by ZSI hosted five presentations. To find out more, please visit our events section.

The next Café will take place on May 4,  at 2:00-3:30 pm CET.

 

“Gender gaps in skills, tasks, and employment outcomes”, written by Laetitia Hauret (LISER), Ludivine Martin (LISER), Piotr Lewandowski (IBS), Marta Palczyńska (IBS) and Nela Šalamon (ZSI) as part of the EU-funded research project, looks into how gender differences in job tasks impact wage and skill mismatches.

 

The first part of the report analyses survey data from 37 countries. Figures from the OECD Survey of Adult Skills (PIAAC) and the World Bank’s STEP Skills Measurement Program indicate that women earn 18.2% less than men, after accounting for differences in age, education level and skills. This is partly because women perform more routine tasks: more of them work in routine-intensive occupations, and in all occupations they do more repetitive tasks than men. Additionally, the difference in wages between routine and non-routine professions is wider for women than for men.

 

“Respondents described their tasks at work, and based on their judgment we classify occupations as routine-intensive,” says Marta Palczyńska. “Those jobs are paid less, and a majority of the people who do them are women. This is one reason women’s average earnings are lower than men’s.”

 

Even when employed in jobs that involve more complex tasks, such as creative problem solving and decision-making, women still tend to do more routine tasks than men. However, in this case the associated pay penalties are, on average, similar to those experienced by men.

 

The report also finds that in countries with tighter laws on gender equality and more egalitarian social norms, the influence of tasks performed on the gender wage gap tends to be smaller. In countries with laws supporting equality in parenting, the segmentation of men and women into more and less routine-intensive occupations might be less pronounced.

 

“When household and child care duties are equally shared with men, women can take up more responsibilities at work, and instead of performing only simple tasks can move to more analytical ones, which has positive effects on their salaries,” Piotr Lewandowski said.

 

In addition to social norms and labour laws, policies that promote re-skilling and up-skilling are equally important in reducing the earnings inequality that results from the difference in the type of tasks performed. With the acceleration of digitalisation, many workers are in positions where their skills do not match the requirements of their jobs. In the European Union, 45% of workers feel they do not have the right skills.

 

Perception of under-skilling on the rise

The second part of the report, focusing on skill mismatch, analyses survey data from 23 European countries. It finds that between 2005 and 2015, self-perception of being under-skilled increased. The change was particularly pronounced for men in Nordic countries, where in 2005 10% of men described themselves as under-skilled, while in 2015 15% described themselves this way. For women, the change was particularly pronounced in Western countries (14% in 2005 versus 18% in 2018). Women performing non-routine interpersonal tasks are particularly likely to believe they lack skills.

 

“The expansion of non-routine cognitive tasks, both analytical and interpersonal, induced by digitalisation can partially explain these changes,” Ludivine Martin says.

 

“Many women switched from routine-intensive jobs to analytical and interpersonal positions,” Laetitia Hauret adds. “That sudden change caused a rise in the number of workers who perceived themselves as underskilled.”

 

Hauret, L., Martin, L., Lewandowski, P., Palczyńska, M., Šalamon, N. (2023). Gender gaps in skills, tasks, and employment outcomes (Deliverable 5.3). Leuven: UNTANGLED project 1001004776 – H2020.

 

The paper is avaliable here.

To find out more please check our event section.

To find out more click here.

The event, organised by UNTANGLED partner Politecnico di Milano, will feature a keynote from Professor George Petrakos of the University of Thessaly, “Geographies of inequality in Europe: Drivers, implications and policy dilemmas”, and papers from the projects UNTANGLED, Pillars, ESSPIN and TWIN SEEDS.

To find out more click here.

 

Fabrizio Pompei, Mirella Damiani and Alfred Kleinknecht’s paper, “Robots, skills and temporary jobs: evidence from six European countries” shows that in a “high knowledge cumulativeness” innovation regime, robot adoption reduces the probability of high-skilled workers being offered temporary job contracts. At the same time, automatisation did not significantly impact the situation of low- and medium-skilled workers.

 

The situation is different in “low-cumulativeness” regimes, where companies primarily use externally acquired knowledge in their innovation process. This makes workers more easily interchangeable, and robot adoption increases the probability of temporary contracts for both medium- and high-skilled workers, but leaves low-skilled workers unaffected.

 

These findings contribute to understanding the increasing share in Europe of temporary workers with tertiary education working as technicians and professionals, as observed by Eurofound.

 

Mirella Damiani, Fabrizio Pompei & Alfred Kleinknecht (2022): “Robots, skills and temporary jobs: evidence from six European countries”, Industry and Innovation.

https://doi.org/10.1080/13662716.2022.2156851

 

 

The event in Cape Town on 14-15 December featured presentations of more than 60 papers; keynotes by Oriana Bandiera of the LSE and Ragui Assaad of the University of Minnesota and a policy panel devoted to youth unemployment in Africa.

 

Two Untangled researchers presented their research during the forum. Piotr Lewandowski discussed his work with Katarzyna Lipowska and Mateusz Smoter on the work from home model. The authors found that employers’ and employees’ attitudes toward work from home differ in terms of salary expectations and perceived productivity changes.

 

Zuzanna Kowalik (IBS) presented a paper written jointly with Piotr Lewandowski and Paweł Kaczmarczyk on the differences in job quality and working conditions between native and migrant platform workers in Poland.

 

 

 

In the chapter, “Digitalization, Job Quality, and Subjective Well-being”, Martin and Hauret examine six facets of job quality studied in the literature: labour income; safety at work; working time and work-life balance; job security; skills development and training; employment-related relationships; and work motivation.

 

The authors also review the literature on the impacts of digitalisation on subjective well-being, captured by employees’ self-reported feelings at work, such as job satisfaction, occupational stress and life satisfaction. Martin and Hauret highlight the key findings in the literature and identify relevant knowledge.

 

Martin and Hauret find that there is substantial literature on the links between digitalisation and job quality in terms of labour income and work-life balance. However, studies on the link between digitalisation and safety at work, job security, skills development, relationships at work, work motivation and self-reported feelings remain scarce, and this calls for further empirical research. Regardless of the outcome variable, studies report mixed results. Differences in how digitalization and outcome variables are measured and conceptualised, as well as the national and time context and employees’ characteristics, may explain these divergent results and conclusions.

 

Martin, L., Hauret, L. (2022). “Digitalization, Job Quality, and Subjective Well-being”. In: Zimmermann, K.F. (eds) Handbook of Labor, Human Resources and Population Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-57365-6_388-1.

 

 

The conference started with a keynote from Anna Salomons, Professor of Employment and Inequality at Utrecht University, who talked about newly emerging job categories (“new work”) and set the tone for the rest of the event.

 

The keynote was followed by four very productive thematic sessions on: Technological change and employment; Skills and education; Technology, growth and value chains; and Firms and households, as well as a panel discussion on policy featuring Mario Mariniello (College of Europe), Eric Thode (Bertelsmann Stiftung) and Thomas Ekman Jorgensen (European University Association).

 

“The conference provided an excellent opportunity both to showcase the work of UNTANGLED researchers and to hear from others in the fields we’re looking at,” says Mikkel Barslund, who coordinates the UNTANGLED research consortium. “We managed to attract a number of high-quality papers with findings that will certainly inspire new avenues of research, and I’d like to thank everyone who contributed to the success of this event.”

 

To find out more about the papers and presentations, please click here.