Does Digitalization Widen Labor Income Inequality?

Jilei Huang, Yi Sun, Liyan Yang, Liyan Yang · International Economic Review · 24 Aug 2026

Where this sits in the debate

Will AI widen inequality? · its finding: it depends (why studies differ)

Direction of the finding as read from the abstract by an AI model (AI-written).

Abstract

ABSTRACT We develop a growth model that endogenizes the occupational choice of workers with different ability levels to study how digitalization affects labor income inequality. The framework incorporates digitalization's multifaceted effects on the economy: (i) it influences economic growth through automation, and (ii) it affects labor income inequality through labor productivity (demand side) and labor time modulation (supply side). We examine how these channels influence wage inequality between skilled and unskilled workers, within each skill group, and economy‐wide. The analysis reveals that digitalization's impact on labor income inequality—whether exacerbating or mitigating disparities—depends on the inequality metric employed.

About this publication

Leading field journal. A leading journal in economics or a neighbouring field (on the Tinbergen Institute’s A list or near the top of the RePEc ranking), or a top-rated computer-science venue.

Placed by: Tinbergen Institute A list. How sources are ranked.

Published: 2026 (2 months ago)
Citations: 5 (OpenAlex)

Citations in context

5 citations — 97th percentile among the 188 indexed papers from 2026 in this collection. Citation counts favor older papers; this compares only same-year papers here, not the whole literature.

author affiliation matches seed institution university of toronto — part of why this paper is in the collection.

Does Digitalization Widen Labor Income Inequality?

Abstract

About this publication

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