Publications

Regional diversification and intra-regional wage inequality in the Netherlands

Published in Regional Studies, 2024

The literature has drawn little attention to the relationship between industrial dynamics (i.e. the rise and fall of industries) and intra-regional wage inequality. This explorative study examines the relationship between industry dynamics and wage inequality in NUTS-3 regions in the Netherlands in the period 2010-2019. While the literature has shown that related diversification in more complex industries enhances economic growth in regions but also inequality between regions, our study shows that related diversification in less complex industries tends to reduce wage inequality within a region. This implies it remains a policy challenge to combine smart and inclusive growth in regions. Our study also showed that there is no significant relationship between exit of industries and regional inequality, with one exception: unrelated low-complex exits tend to increase intra-regional wage inequality. Overall, these findings suggest that related diversification in less complex industries tends to bring benefits in terms of inclusive growth, while unrelated exits in less complex industries tend to do the opposite.

Recommended citation: Cortinovis, N., Zhang, D., & Boschma, R. (2024). Regional diversification and intra-regional wage inequality in the Netherlands. Regional Studies, 1–15.
Download Paper

Who benefits from AI adoption? Skill complementarity and labour market dynamics

Author: Dongmiao Zhang
Status: under review
Year: 2024

Recent studies on artificial intelligence (AI) and labour market outcomes often focus on the automation effects of AI. However, which skills might complement AI technologies and how AI adoption shapes employment and wage dynamics remain under-explored at the occupation level. Moving beyond the classic measurement of skills such as education, tenure or specific skill categories, I assess how many skills are combined in an occupation and their respective complexity. I refer to this as “complexity intelligence” and propose that occupations with high complexity intelligence will complement AI technologies. Most notably, the findings show that complex occupations are more likely to adopt AI technologies. In addition, there is a positive correlation between AI adoption and employment growth. AI adoption is associated with an increase in wage growth on average, with a larger increase for complex occupations.

The creative destruction of Artificial Intelligence on occupations: evidence from U.S. Metropolitan areas

Author: Dongmiao Zhang, Ron Boschma, Pierre Alex Balland
Status: preperation for submission
Year: 2024

The influence of Artificial Intelligence (AI) on the labour market is one of the paramount challenges of our time. Although this subject has undoubtedly garnered significant attention, most studies are conducted at the national scale and ignore heterogeneous impacts across regions. This paper adopts an explicit geographical perspective to assess the creative destruction of AI on occupations. We develop a Spatial AI Occupation Index to explore how a region’s entry into AI technologies - i.e. the development of new specializations in AI - relates to the changes in employment at the occupational level. We find that the entry of AI technologies is associated with an increase in employment for occupations that possess a high potential for augmentation by AI. On the other hand, employment for routine-intensive occupations tends to decline. We also find evidence that AI may lead to shifting occupational specialization of regions: high AI-intensive MSAs are increasingly specialized in non-routine occupations that require creativity and interpersonal skills. This indicates that AI-intensive regions are likely to be more resilient and prosper from the AI transition, while regions that specialize in routine occupations are at risk of losing out.