--- title: "Does Digitalization Widen Labor Income Inequality? · AI Fault Line" url: https://aifaultline.com/research/p/doi-10-1111-iere-70099/ description: "AI Fault Line is a neutral, evidence-cited field guide to why experts looking at the same developments disagree about AI's effect on productivity, jobs, inequality, regulation and the pace of change." --- [Research](https://aifaultline.com/research/) # Does Digitalization Widen Labor Income Inequality? Jilei Huang, Yi Sun, Liyan Yang, Liyan Yang · International Economic Review · 24 Aug 2026 [Read original source](https://doi.org/10.1111/iere.70099) Open access Where this sits in the debate - [Will AI widen inequality?](https://aifaultline.com/debate/inequality/) · its finding: it depends ([why studies differ](https://aifaultline.com/debate/inequality/#why)) Direction of the finding as read from the abstract by an AI model ([AI-written](https://aifaultline.com/about/)). ## 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](https://aifaultline.com/about/#source-ranking). Published 2026 (2 months ago) Citations 5 (OpenAlex) ## Citations in context [Chart: 5 citations, cohort median 0] 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. [Chart: published 2026] author affiliation matches seed institution university of toronto — part of why this paper is in the collection. ## More on this topic Related by theme, not necessarily by method or conclusion. - [The Effects of Generative AI on High Skilled Work: Evidence from Three Field Experiments with Software Developers](https://aifaultline.com/research/p/doi-10-2139-ssrn-4945566/) SSRN · 2024 - [GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models](https://aifaultline.com/research/p/doi-10-48550-arxiv-2303-10130/) arXiv · 2023 - [Extending “GPTs Are GPTs” to Firms](https://aifaultline.com/research/p/doi-10-1257-pandp-20251045/) AEA Papers and Proceedings · 2025 - [New Frontiers: The Origins and Content of New Work, 1940–2018](https://aifaultline.com/research/p/doi-10-1093-qje-qjae008/) The Quarterly Journal of Economics · 2024 Overview assembled automatically from collected metadata. [How this site is built](https://aifaultline.com/about/).