How the world of work is changing: A review of the evidence

This paper presents an overview of some of the recent literature about the long-run changes in labour market outcomes in advanced economies. It shows that the First and Second Industrial Revolutions, with inventions in the second half of the 19th century that had a lasting impact up to 1980, resulted in skill upgrading and decreasing overall wage inequality. To the contrary, the Computer Revolution that started in the 1980s is no longer unambiguously skill-upgrading but characterized by an underlying process of job polarization and an increase in upper-tail and overall wage inequality. However, the paper concludes by providing arguments in favour of optimism about future computerization as long as our labour markets are able to provide the necessary worker skills to support such changes.